Computing and Assessing Plant Asset Impairment On January 1, Zeibart Company purchases equipment for $200,000....
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Computing and Assessing Plant Asset Impairment On January 1, Zeibart Company purchases equipment for $200,000. The equipment has an estimated useful life of 10 years and expected salvage value of $25,000. The company uses straight-line depreciation. Four years later, economic factors cause the fair value of the equipment to decline to $90,000. On this date, Zeibart examines the equipment for impairment and estimates undiscounted expected cash inflows from this equipment of $125,000
(a) Compute the annual depreciation expense relating to this equipment.
(b) Compute the equipment's net book value at the end of the fourth year.
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