Question 4

On August 30, 2018, Harris Pilton purchased a noncurrent asset at a cost of $400,000 with a salvage value of $50,000 and estimated 8-year useful life. At December 31, 2020, the company decided it would sell the asset by January 1, 2022. The company began advertising for the asset and is currently in the process of receiving offers. The fair value of the asset is currently $450,000 and it is estimated to cost $10,000 to sell. The total present value of the future cash flows that will be received from the use of the asset is $200,000.

Instructions

1.At what value should this asset be reported on the December 31, 2020, balance sheet?