Safety-First Company completed all of its October 31, 2014, adjustments in preparation for preparing its financial statements, which resulted in the following trial balance.

Account.....................Balance

Accounts payable .......................................................... $11,220

Accounts receivable.......................................................... 19,800

Accumulated depreciation, building.................................. 79,200

Accumulated depreciation, equipment............................... 37,400

Accumulated depreciation, furniture.................................. 20,900

Allowance for doubtful accounts............................................ 880

Building ............................................................................ 136,400

Cash..................................................................................... 11,000

Equipment............................................................................ 90,200

Expenses, including cost of goods sold............................. 761,200

Furniture.............................................................................. 50,600

Land................................................................................... 105,600

Merchandise inventory........................................................ 35,200

Note payable........................................................................ 85,800

Sales.................................................................................... 904,200

Tarifa Sharma, capital .......................................................... 62,480

Unearned revenues .................................................................. 7,920

Other information:

1. All accounts have normal balances.

2. $26,400 of the note payable balance is due by October 31, 2015.

The final task in the year-end process was to assess the assets for impairment, which resulted in the following schedule.

Asset.............Recoverable Value

Land ................................................................... $136,400

Building................................................................ 105,600

Equipment............................................................... 28,600

Furniture ................................................................ 15,400

Required

1. Prepare the entry (entries) to record any impairment losses at October 31, 2014. Assume the company recorded no impairment losses in previous years.

2. Prepare a classified balance sheet at October 31, 2014.

Analysis Component

What is the impact on the financial statements of an impairment loss?