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Your company rents computers to local businesses and schools. You have 1,400 computers with a book value of $165,000. As a result of changing technology,
Your company rents computers to local businesses and schools. You have 1,400 computers with a book value of $165,000. As a result of changing technology, your computers are more difficult to rent so you must drastically reduce your rental price, which causes a decrease in estimated future cash flows. The fair value of the computers is estimated to be $122,000 because of their outdated technology. Your company should report an asset impairment loss of:
$43,000.
$0
$122,000.
$165,000.
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