On January 1, 2014, Borstad Company purchased equipment for $1,200,000. It is depreciating the equipment over 25 years using the straight-line mothod and a zero residual value. Late in 2019, because of technological changes in the industry and reduced selling prices for its products, Borstad believes that its equipment may be impaired and will have a remaining useful liee of 8 years. Borstad estimates that the equipment will produce cash infilows of 420,000 and will incur cash outllows of $307,000 each year for the next 8 years. It is not able to determine the fair value of the equipment based on a current selling price. Borstad's discount rate is 14% Required: 1. Prepare schedules to determine whether, at the end of 2019 , the equipment is impaired and. If so, the impairment loss to be recognized. 2. Prepare the journal entry to rocord the impairment. 3. Next Level How would your answer to Requirement 1 change if the discount rate was 18% and the cash flows were expected to continue for 6 yoars? 4. Next Level How would your answer change if management planned to implement emciencies that would save s1t,000 each year? 5. Refer to Requirement 1 and assume that the company uses IFRS. If determines that the falr value of the equipment is $573,000 and estimates that it would cost $13,000 to sell the equipment. How much would the company recognize as the impaiment loss? 1. Prepare schedules to determine whethec, on Decomber 31, 2019, the equipment is impalred and, if so, the impairment loss to be rocognced Enter the Accumulated Depreciation amount as a negative number. Complete the Recoverability Test and determine the results of the test. Additional instructions Question not attempted. Question not attempted. Staded cells have feedback. The book value is than the undiscounted expected net cash flows so Borstad 2019. recognize an impairment loss at December 31, Complete the Impairment Analysis to determine the amount of the loss (if any) under US GAAP at December 31, 2019. Additional instructions Question not attempted. 2. Prepare the journal entry on December 31, 2019 to record the impairment. General Joumal Instructions How does grading work? 3. How would your answer to Requirement 1 change if the discount rate was 18% and the cash flows wore oxpected to continue for 6 years? Additional Instructiod Borstad Company would recognize a loss of if the discount rate was 18% and the cash flows were expected to continue for 6 yeart 4. How would your answer change if management planned to implement efficiencies that would save $11,000 each year? Step 1: Complete the Recoverability Test below. Additional lnstructions Question not attempted. Question not attempted. 5. Reler to Requirement 1 and assume that the company uses IFRS. If determines that the fair value of the equipment is $573,000 and estimates that it would cost $13,000 to sell the equipment. How much would the company recognize as the impaiment loss? Acditional lnstructions