Question
On January 2, 2012, Reed Co. purchased a machine for $900,000 and established an annual depreciation charge of $90,000 over a 10-year life. At the
On January 2, 2012, Reed Co. purchased a machine for $900,000 and established an annual depreciation charge of $90,000 over a 10-year life. At the end of 2014, Reed concluded that $450,000 was a reasonable estimate of the sum of the undiscounted net cash inflows expected to be recovered through use of the machine for the period January 1, 2015 through December 31, 2021. The machines fair value was $420,000 at the end of 2014. In Reeds December 31, 2015, balance sheet, the machine should be reported at a carrying amount of
a) $0
b) $150,000
c) $360,000
d) $400,000
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