Question 6 (10 marks) Wizards Corporation's balance sheet includes the following asset: Equipment.......................

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Question 6 (10 marks)
Wizards Corporation's balance sheet includes the following
asset:
Equipment.......................................................................................
$110,000
Less:
Accumulated depreciation..................................................... (20,000)
Carrying amount
(book value)........................................................ $90,000
After performing its annual review for impairment, Wizards
obtains the following data:
Asset value
in use............................................................................
$64,000
Fair value less
selling costs.............................................................
$67,000
Instructions
Assuming Wizards uses the rational entity impairment model:
a. Determine the recoverable amount and explain the
rule succinctly. (4 marks)
b. Calculate the impairment loss. (4 marks)
c. Prepare the entry to record the impairment loss.
(2 marks)
Please answer all parts.