General Optic Corporation operates a manufacturing plant in Arizona. Due to a significant decline in demand for the product manufactured at the Arizona site, an impairment test is deemed appropriate. Management has acquired the following information for the assets at the plant: Cost Accumulated depreciation General's estimate of the total cash flows to be generated by selling the products manufactured at its Arizona plant, not discounted to present value The fair value of the Arizona plant is estimated to be $11 million. Required: 1. Determine the amount of impairment loss. 2. If a loss is indicated, prepare the entry to record the loss. $ 32.5 million $ 14.2 million $ 15 million 3. & 4. Determine the amount of impairment loss assuming that the estimated undiscounted sum of future cash flows is (3) $12 million instead of $15 million and (4) $19 million instead of $15 million. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 and 4 Determine the amount of impairment loss. Note: Enter your answer in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). Impairment loss million
General Optic Corporation operates a manufacturing plant in Arizona. Due to a significant decline in demand for the product manufactured at the Arizona site, an impairment test is deemed appropriate. Management has acquired the following information for the assets at the plant: Cost Accumulated depreciation General's estimate of the total cash flows to be generated by selling the products manufactured at its Arizona plant, not discounted to present value The fair value of the Arizona plant is estimated to be $11 million. Required: 1. Determine the amount of impairment loss. 2. If a loss is indicated, prepare the entry to record the loss. $ 32.5 million $ 14.2 million $ 15 million 3. & 4. Determine the amount of impairment loss assuming that the estimated undiscounted sum of future cash flows is (3) $12 million instead of $15 million and (4) $19 million instead of $15 million. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 and 4 Determine the amount of impairment loss. Note: Enter your answer in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). Impairment loss million
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:General Optic Corporation operates a manufacturing plant in Arizona. Due to a significant decline in demand for the product
manufactured at the Arizona site, an impairment test is deemed appropriate. Management has acquired the following information for
the assets at the plant:
Cost
Accumulated depreciation
General's estimate of the total cash flows to be generated by selling the products
manufactured at its Arizona plant, not discounted to present value
The fair value of the Arizona plant is estimated to be $11 million.
Required:
1. Determine the amount of impairment loss.
2. If a loss is indicated, prepare the entry to record the loss.
$ 32.5 million
$ 14.2 million
$ 15 million
3. & 4. Determine the amount of impairment loss assuming that the estimated undiscounted sum of future cash flows is (3) $12 million
instead of $15 million and (4) $19 million instead of $15 million.
Complete this question by entering your answers in the tabs below.
Req 1
Req 2
Req 3 and 4
Determine the amount of impairment loss.
Note: Enter your answer in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).
Impairment loss
million
<Req 1
Req 2 >
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