Problem 4 Information related to the Super Max Online company equipment available as of December 31, 20x1 is: Acquisition cost $5,600,000 Accumulated depreciation 640,000 Expected future net cash flows 4,000,000 Market value 2,720,000 It is assumed that the company will continue using the asset in the future. As of December 31, 20x1, the equipment has a remaining useful life of 4 years. Instructions: 1. Indicate that two values of must be compared to apply the recoverability rule. 2. Indicate if the recoverability test indicates impairment and why. 3. Determine the impairment loss to report, if applicable, and prepare the record entry corresponding to December 31, 20x1.

Information related to the Super Max Online company equipment available as of December 31,201 is: Acquisition cost $5,600,000 Accumulated depreciation 640,000 Expected future net cash flows 4,000,000 Market value 2,720,000 It is assumed that the company will continue using the asset in the future. As of December 31,201, the equipment has a remaining useful life of 4 years. Instructions: 1. Indicate that two values of must be compared to apply the recoverability rule. 2. Indicate if the recoverability test indicates impairment and why. 3. Determine the impairment loss to report, if applicable, and prepare the record entry corresponding to December 31,201