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Does maple need to record impairment for furniture and why

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On January 1, 2015, Maple Inc. purchased an equipment at a cost of $74,000. The estimated useful life of the equipment is 5 years, with a residual value of $4,000. The firm applies the straight-line depreciation method over the useful life of the equipment and has a December 31, fiscal year-end.

Problem 1: Maple Inc. owns a furniture that as of December 31, 2019, had a cost of $50,000 and accumulated depreciation of $40,000. The firm had a reason to believe that the furniture was impaired. The firm estimated the future cash flows of the furniture at $9,000 and the fair value of the furniture at $7,000. Does Maple Inc. need to record an impairment for this furniture? If so, show your work to explain why and provide the journal entry for the impairment.

Reference no: EM132767327

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