The Andrew Company is trying to determine whether a certain piece of equipment should be written down due to impairment. The cost of the equipment is $1,200,000 with accumulated depreciation to date of $600,000. The life of the equipment is 12 years with no salvage value. On December 31, 2014 management determined the future net cash flows to be $500,000 and the fair value to be $450,000. The company intends to use the equipment in the future.
1)Record the entry (if any) to record the impairment at December 31, 2014.
2)Record the depreciation expense for 2015
3)Suppose at the end of 2015 the fair value of the asset is $490,000. What entry if any would Andrew Company record.
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