Case E

Robert Sporting Goods Company has another piece of equipment (Q102) with the following cost and accumulated depreciation at its year ended December 31, 2020:

Equipment (Q102) $9 000 000

Accumulated Depreciation 3 000 000

Due to obsolescence and physical damage, the equipment was found to be impaired. At the year-end Robert Sporting Goods Company had determined the following information:

Fair value less cost of Disposal $4 500 000

Value in use or discounted net cash flows 4 000 000

Undiscounted net cash flows 5 500 000

Required:

Assess equipment (Q102) for impairment and prepare the journal entry (if necessary) to report any impairment loss for the year. When selecting from dropdown lists, if a line item does not apply, select NA and place zero in the field in the number column. Do not leave any number fields blank.

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