Computing and Assessing Plant Asset Impairment

Zeibart Company purchased equipment for $$216,000$ on July $1,2019,$ with an estimated useful life of $10$ years and expected salvage value

of $$24,000.$ Straight$-$line depreciation is used. On July $1,2023,$ economic factors cause the fair value of the equipment to decline to

$$86,400.$ On this date, Zeibart examines the equipment for impairment and estimates $$120,000$ in future cash inflows related to use of

this equipment.

a$.$ Compute the impairment loss, if any. $

Enter as a positive number. Enter $$0$ if the equipment would not be considered impaired.

b$.$ Determine the amount of depreciation Zeibart would record for the $12$ months from

July $1,2023$ through June $30,2024.$ $

Hint: Assume no change in salvage value.

Round amount to the nearest whole dollar amount

c$.$ Prepare the journal entries to record the impairment loss and depreciation expense for the

$12-$month period.

Select $\text{'}$No debit' and $\text{'}$No credit' in the Account fields of the first entry if there was

no impairment.