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On 3anuary 1, 2014, Borstad Company purchased equipment for $1,200,000. It is depreciating the equipment over 25 years using the straight-line method and a zero residual value. Late in 2019 , because of technological changes in the industry and reduced selling prices for its products, Borstad belleves that its equipment may be impaired and wil have a remaining usetul tlfe of 8 years. Borstad estimates that the equipment will produce cash inflows of $420,000 and will incur cash outhows of $307,000 each year for the next B years. It is not able to determine the talt value of the equipment based on a current selling price. Borstad's discount rate is 1444 . Required: 1. Prepare schedules to determine whether, at the end of 2019, the equipment is impaired and, if so, the impairment loss to be recognized. 2. Prepare the joumal entry to record the impairment. 3. Next Level How would your answer to Requirement 1 change if the discount rate was 18% and the cash flows were oxpected to continue for 6 . years? 4. Next Level How would your answer change if management planned to implement efficiencies that would save S11,000 each year? 5. Reler to Requiroment 1 and assume that the company uses iFPS. It determines that the fair value of the equipment is 5573,000 and estimates that if would cost $13,000 to sell the equipment. How much would the company recognize as the impaliment loss? Complete the impairment Analysis to determine the amount of the loss (if any) under US GAAP at December 31, 2019. Additional Instructions Question not attempted. 1. Prepare schedules to determine whether, on December 31, 2019, the equipment is impaired and, if so, the impairment loss to be recognized. Enter the Accumulated Depreciation amount as a negative number. Complete the Recoverability Test and determine the results of the test. Additional instructions huectinn nat attemnted. 2. Prepare the joumal entry on December 31, 2019 to record the impairment. General Joumal lastructions How does srading work? 3. How would your answor to Requirement 1 change if the discount rate was 18% and the cash flows were expected to continue for 6 yoars? Additional instruction Borstad Company would recognize a loss of if the discount rate was 18% and the cash flows wore expected to continue for 6 years. 5. Refer to Requirement 1 and assume that the company uses IFRS. It determines that the fair value of the equipment is 5573,000 and estimates that it would cost \$13,000 to sell the equipment. How much would the company recognize as the impairment loss? Additional instructions Ouestion nat attomnted

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