Reference no: EM132807236

Max Inc. purchased on January 2, 2017, equipment with a cost of $10,440,000, a useful life of 10 years and no salvage value. The Company uses straight-line depreciation. At December 31, 2017 and December 31, 2018, the company determines that impairment indicators are present.

The following information is available for impairment testing at each year end:

                                                     12/31/2017                        12/31/2018
Fair value less cost to sell     $9,315,000                             $8,350,000
Value-in-use                     $9,350,000                                 $8,315,000

Problem 1: There is no change in the asset's useful life or salvage value. The 2018 income statement will report (impairment loss or recovery of impairment loss) ___________ of $_____________