Obaid Company owned the following equipment at December $31,2022$:

Cost $$280,000$

Accumulated depreciation $32,000$

Expected future net cash flows $200,000$

Fair value $136,000$

Obaid plans to continue using this asset in the future. As of December $31,2022,$ the equipment

has a remaining useful life of $4$ years.

Requirement:

a$.$ Is the asset considered impaired for accounting purposes? Show how you determined this.

b$.$ Prepare the journal entry to record impairment, if one is required. If no impairment, write

not applicable.

c$.$ Obaid computes depreciation using the straight$-$line method. Prepare the journal entry to record depreciation expense for

$2023,$ assuming no residual value.

d$.$ At the end of $2023,$ the fair value of the equipment had increased to $$205,000.$ Prepare the journal entry to record the

increase in fair value according to U$.$S$.$ accounting standards.