Question

Your company rents computers to local businesses and schools. You have 4,000 computers with a book value of $185,000. 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 The fair value of the computers is estimated to be $119,500 because of their outdated technology.
Your company should report an asset impairment loss of $______.

Answer 1

Answer:

47,000

Explanation:

Impairment Loss = Book Value − Fair Value

$180,500 − $133,500 = $47,000