Exercise 11-23 (Part Level Submission) The information that follows relates to equipment owned by Buffalo Limited at December 31, 2017: Cost Accumulated depreciation to date Expected future net cash flows (undiscounted) Expected future net cash flows (discounted, value in use)6,413,500 Fair value Costs to sell (costs of disposal) 9,090,000 1,010,000 7,070,000 6,262,000 50,500 At December 31, 2017, Buffalo discontinues use of the equipment and intends to dispose of it in the coming year by selling it to a competitor. It is expected that the costs of disposal will total 50,500. (a1-a3) Assume that Buffalo is a private company that follows ASPE. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) 1. 2. 3. Prepare the journal entry at December 31, 2017, to record asset impairment, if any. Prepare the journal entry to record depreciation expense for 2018. Assume that the asset was not sold by December 31, 2018. The equipment's fair value (and recoverable amount) on this date is $6.565 million. Prepare the journal entry, if any, to record the increase in fair value. It is expected that the costs of disposal will total $50,500 No. Account Titles and Explanation Debit Credit