Your Company Rents Out Computers to Local Businesses and Schools

Multiple Choice

Your company rents out computers to local businesses and schools.You have 1,000 computers with a net book value of $160,000.As a result of changing technology,your computers are more difficult to rent so you must severely reduce your rental price,which causes a decrease in estimated future cash flows.The fair value of the computers is estimated to be $125,000 because of their outmoded technology.Your company should report an asset impairment loss of:

A) $160,000.
B) $125,000.
C) $35,000.
D) none of the above.