In: Accounting
PLEASE WORK THE PROBLEM STEP BY STEP. MY PROFESSOR IS A VERY HARD GRADER ALWAYS WANT STUDENT SHOW WORK.
Sanders Corporation operates a factory in Arizona. Due to a change in business climate an impairment test is deemed appropriate. Management has acquired the following information:
Cost $243,000,000
Accumulated depreciation 112,000,000
Estimate of the total undiscounted
future cash flows 110,000,000
Present value of estimated
future cash flows 94,000,000
Estimated fair value of the Arizona
factory, as appraised 90,000,000
Required:
a) Determine the amount of the impairment loss if any.
b) If a loss is indicated, prepare the entry to record the loss.