Identifying and Recording Impairment Loss on Equipment

Bolt Company purchased equipment on January $1$ of Year $1$ for $$13,600.$ This equipment has an estimated useful life of five years, a residual value of $$1,600,$ and is

depreciated using the sum$-$of$-$the$-$years'$-$digits method. At the beginning of Year $3,$ Bolt suspects that the original investment in the asset will not be realized; the

total remaining future cash inflow expected to be produced through use of the equipment, including the original residual value, is $$4,000.$ The equipment's fair

value at January $1$ of Year $3$ is $$2,800.$

a$.$ Determine whether the asset is impaired and, if so$,$ the amount of the impairment loss on January $1$ of Year $3.$

Note: If the asset is not impaired, enter a zero $($or leave blank$)$ for the loss.

Note: Do not use a negative sign with your answer.

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b$.$ Compute depreciation for Year $3.$

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