1. Wolz's Domino Manufacturing Company learned that one of its cutting machines is obsolete. Although the company will continue to use this machinery in the future, management believes that an impairment write-down is required. The following information relates to the cutting machine (Cick the icon to view the information.) The firm estimates that the machine has a useful life of 11 years and it has used it for 5 years. It has no salvage value. Read the requirements? Requirement a. Prepare the journal entry required to record the impairment loss. (Record debits first, then credits. Exclude explanations from any journal entries.) Account Date of Impairment alalla Requirement b. Assuming that Wolz's uses the straight-line method with no residual value, prepare the journal entry to record the revised depreciation expense for the first year immediately following the impairment. Account Subsequent Year (5) (6) (7) (8) Requirement c. Assume that 2 years following the impairment write-down, the fair value of the asset falls to $731,000. The sum of the undiscounted future cash flows is $754,000. What is the carrying value of the asset at this time? Prepare any journal entry necessary to reflect the change in fair value. What is the carrying value of the asset at this time? The carrying value of the asset two years following the impairment write-down is $ Prepare any journal entry necessary to reflect the change in fair value. (Record debits first, then credits. Exclude explanations from any journal entries. If no entry is required select "No Entry Required" on the first line of the journal entry table and leave all remaining cells in the table blank.) Account Date of Impairment (9) (10) (11) (12) Print 1: Data Table Cutting Machine $ 3,226,000 $ 1,281,000 $ 1,229,000 Description Cost Accumulated depreciation (up to the date of the impairment test) Total estimated future cash flows Total discounted future cash flows Estimated fair value Costs to sell Remaining useful life from the impairment date $ 1,078,000 $ 1,074,000 $ 5,000 6 years 2: Requirements a. Prepare the journal entry required to record the impairment loss. b. Assuming that Wolz's uses the straight-line method with no residual value, prepare the journal entry to record the revised depreciation expense for the first year immediately following the impairment. C. Assume that 2 years following the impairment write-down, the fair value of the asset falls to $731,000. The sum of the undiscounted future cash flows is $754,000. What is the carrying value of the asset at this time? Prepare any journal entry necessary to reflect the change in fair value
