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 $18.5 million. Required: 1. Determine the amount of impairment loss. 2. If a loss is indicated, prepare the entry to record the loss. 3. & 4. Determine the amount of impairment loss assuming that the estimated undiscounted sum of future cash flows is (3) $18.5 million instead of $18 million and (4) $32.25 million instead of $18 million. Complete this question by entering your answers in the tabs below. Req 1 Req 2 3. Impairment loss 4. Impairment loss Req 3 and 4 Determine the amount of impairment loss assuming that the estimated undiscounted sum of future cash flows is (3) $18.5 million instead of $18 million and (4) $32.25 million instead of $18 million. Note: Enter your answer in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). million million $ 47.5 million $15.7 million $18.0 million < Req 2 Req 3 and 4
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 $18.5 million. Required: 1. Determine the amount of impairment loss. 2. If a loss is indicated, prepare the entry to record the loss. 3. & 4. Determine the amount of impairment loss assuming that the estimated undiscounted sum of future cash flows is (3) $18.5 million instead of $18 million and (4) $32.25 million instead of $18 million. Complete this question by entering your answers in the tabs below. Req 1 Req 2 3. Impairment loss 4. Impairment loss Req 3 and 4 Determine the amount of impairment loss assuming that the estimated undiscounted sum of future cash flows is (3) $18.5 million instead of $18 million and (4) $32.25 million instead of $18 million. Note: Enter your answer in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). million million $ 47.5 million $15.7 million $18.0 million < Req 2 Req 3 and 4
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please complete all requirement and Do not Give image format
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 $18.5 million.
Required:
1. Determine the amount of impairment loss.
2. If a loss is indicated, prepare the entry to record the loss.
3. & 4. Determine the amount of impairment loss assuming that the estimated undiscounted sum of future cash flows is (3) $18.5
million instead of $18 million and (4) $32.25 million instead of $18 million.
Complete this question by entering your answers in the tabs below.
Req 1
Req 2
3. Impairment loss
4. Impairment loss
Req 3 and 4
Determine the amount of impairment loss assuming that the estimated undiscounted sum of future cash flows is (3) $18.5
million instead of $18 million and (4) $32.25 million instead of $18 million.
Note: Enter your answer in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).
million
million
$ 47.5 million
$15.7 million
$18.0 million
< Req 2
Req 3 and 4 >
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education