On December 31, 2020, Stone County Manufacturing determined that a piece of manufacturing equipment needed to be tested for impairment due to changing market conditions. The equipment was originally purchased on January 1, 2017 for $370,000. The asset has been depreciated using the straight-line method with a $30,000 residual value and a 10 year useful life.

As of December 31, 2020, the estimated future cash flows to be realized from this equipment is $225,000. The fair value of the equipment at the same date was estimated to be $205,000.

a) (7 pts) Determine the net book value of the asset as of December 31, 2020 before the impairment test was performed. (Please show your work for partial credit.)

b) (6 pts) Determine the amount of the impairment loss, if any, that Stone needs to record on December 31, 2020 as a result of the impairment test. (Please show your work for partial credit.)