Velocity Bikes Inc. (VBI) prepares its financial statements in accordance with IFRS. VBI has changed the way they manufacture bikes, thus the extent to which an old piece of equipment is being used has been diminished and the controller has determined that the equipment must be assessed for impairment. The following details relate to the piece of equipment: The equipment has a carrying value of $171,000. The company that sold VBI the equipment has estimated that the equipment could be sold on the used equipment market for $150,000. Selling costs are estimated to be 5% of the selling price. The valuation was supported with a recent transaction involving a similar asset in a similar condition (age, usage). The cash flow generated by the equipment in cach of the next five yoars is $34,000, with a $3,000 salvage value at the end of the five year period. The appropriate discount factor is 6%. Instructions: a. Determine if the asset is impaired and provide supporting calculations assuming that VBI follows IFRS, where the recoverable amount of the equipment is the greater of its fair value less cost to dispose of the asset and its value in use. (3 marks) b. Provide the journal entry required to record impairment, if any. (2 marks) c. Classify cach of the two inputs (used in the recoverable amount calculation above) based on the IFRS 13 fair value hierarchy. (2 marks)