Chapter 11, Problem 4UJ

To determine

Impairment: Impairment of the assets means the market value of asset is less than the value reported in the balance sheet.

1) Accounting:

(a)

To determine the amount of impairment loss that should be reported for fiscal year 2016 and the book value at which it should be reported.

To determine

(b)

To compute: To compute the following:

(1) The estimated remaining useful life is 10 years.

(2) The estimated annual cash flows are $2,720,000 per year.

(3) Discount rate is 6%.

To determine

2) Analysis

To determine the implications of sale transaction in 2016 financial statements.

To determine

3) Principles

To determine the impaired assets can be written up back.