Pallmall Company has a truck which was purchased in prior years for $60,000. At the end of 2013, there is $30,000 of accumulated depreciation. The value of the truck has been impaired, and its remaining value is now estimated at $18,000. Please provide the journal entry needed to record the asset impairment.
Definitions:
NPV
NPV is a calculation that determines the expected financial profitability of a given investment or project by assessing the difference between the current value of all incoming and outgoing cash flows.
Positive NPV Projects
Projects with a net present value greater than zero, indicating they are expected to generate profit over their lifetime.
Target Cash Balance
The optimal amount of cash that a company aims to hold for operational and precautionary purposes.
Carrying Costs
Expenses associated with holding or carrying inventory, including storage, insurance, taxes, and opportunity costs.
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