Wildhorse Inc. purchased a non$-$renewable licensing agreement for access to proprietary technology that allows it to produce biochar from organic waste. When the $10-$year licensing agreement was purchased $6$ years ago there were no other companies operating in the space. However, numerous competitors have emerged in the industry as direct competitors to Wildhorse Inc. As a result of recent market entrants, the market demand for its bio$-$char products has been steadily declining. The company has the following information available related to the licensing agreement:

Licensing agreement at Cost $$128,100$

Estimated Useful Life $10$ years

Salvage Value

$$0$

Wildhorse Inc. is currently testing this asset for impairment. While the licensing agreement could currently be sold for $$39,100,$ Wildhorse inc. plans to keep producing the bio$-$char two more years. It expects net cash flows from production to be $$18,000$ yearly and that it can sell the licensing agreement for $$7,700$ at the end of year two. The current interest rate is $5\%.$

$($a$)$

Assume that Wilchorse Inc. follows ASPE and uses the cost recovery impairment model. Calculate the carrying amount and recoverable amount.

Carrying amount of the licensing agreement $

Recoverable amount

$