Reference no: EM132785727

On January 1, 2016, UA Company acquires a machine for a total cost of $600,000. The machine is estimated to have a 5-year useful life and $10,000 residual value. UA Company uses the straight-line method of depreciation.

On December 31, 2016, the company determines that the machine is impaired and makes the following estimates:

Fair value less cost to sell $ 210,000

Value in use $ 200,000

On December 31, 2019, ABC Company determines an indication that the impairment loss recognized in the prior period may no longer exist. The entity makes the following estimates and computations:

Fair value less cost to sell $ 120,000

Value in use $ 125,000

problem 1: How much is the gain (loss) that should be recognized in UA Company's December 31, 2019 profit or loss ?