Question: 1. Identify the main difference between
(1) plant assets and inventory,
(2) plant assets and current assets, and
(3) plant assets and long-term investments.
2. Assume a company's equipment carries a book value of $4,000 ($4,500 cost less $500 accumulated depreciation) and a fair value of $3,750, and that the $250 decline in fair value in comparison to the book value meets the 2-step impairment test. Prepare the entry to record this $250 impairment.