Question 2: Impairment of Assets. Atlas Corporation's balance sheet includes the following asset: Equipment.............

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Question 2: Impairment of Assets. Atlas Corporation's
balance sheet includes the following asset:
Equipment..............................................................................
$110,000
Less: Accumulated
depreciation............................................
(20,000)
Carrying amount (book value)
...............................................
$90,000
As at December 31, 2019, the equipment has a remaining
useful life of 8 years. Atlas uses the straight-line method of
depreciation.
After performing its annual review for impairment, Atlas
obtains the following data:
Asset value in use (expected future cash net cash flows,
discounted)...........................$64,000
Fair value less selling
costs...............................................................................................$67,000
Required:
Assuming Albania uses the rational entity impairment model (round
answers to 0 decimal places)
a) Calculate the recoverable amount.
b) Calculate the impairment loss and prepare the entry to
record the impairment loss.
c) The equipment’s fair value at December 31, 2020 is
now $80,000 prepare the journal entry, if any to record the
increase in fair value.
d) How would your answer in part c differ if Atlas followed
ASPE