A building has a cost of $1,500,000 and accumulated depreciation of $250,000. The fair value of the

Question:

A building has a cost of $1,500,000 and accumulated depreciation of $250,000. The fair value of the building is estimated to be $600,000. The building is expected to generate net cash inflows of $40,000 per year for the next 30 years.
(1) Determine whether the building is impaired and
(2) If it is impaired, make the journal entry necessary to record the impairment loss.