1. Downtown Corp. purchased a patent several years ago for $1,000,000. As of 12/31/19, amortization totaling $700,000 has already been recorded on the patent.

At the end of 2019, Downtown believes the future cash flows the patent will generate will equal $225,000. It also estimates the fair value of the patent to be $200,000.

How much of an impairment loss, if any, should Downtown record in 2019 related to this patent?

1. $100,000
2. $ 75,000
3. $800,000
4. $775,000
5. $ 25,000
6. None. There is no impairment.