On December31, Year1, Brown Brothers purchased machine A for$770,000 and machine B for$300,000. The machines are depreciated on thestraight-line basis over 10 years with no salvage value. Brown reviews its assets for impairment annually. While doing the U.S. GAAP impairment analysis atyear-end Year6, Brown determines that the expected future cash flows are$70,000 per year from machine A and$40,000 per year from machine B over the remaining lives of the assets. At December31, Year6, the fair values of machines A and B are$300,000 and$180,000, respectively. What amount of impairment loss should Brown report on its Year 6 income statement under U.S.GAAP?

A.

$85,000

B.

$50,000

C.

$35,000

D.

$