E$8-42.$ Computing and Assessing Plant Asset Impairment

Zeibart Company purchased equipment for $$180,000$ on July $1,2019,$ with an estimated useful life of $10$ years and expected salvage value of $$20,000.$ Straight$-$line depreciation is used. On July $1.2023,$ economic factors cause the fair value of the equipment to decline to $$72,000.$ On this date, Zeibart examines the equipment for impairment and estimates $$100,000$ in future cash inflows related to use of this equipment.

a$.$ Is the equipment impaired at July $1,2023?$ Explain.

b$.$ If the equipment is impaired on July $1,2023,$ compute the impairment loss and prepare a journal entry to record the loss.

c$.$ What amount of depreciation expense would Zeibart record for the $12$ months from July $1.2023$ through June $30,2024?$ Prepare a journal entry to record this depreciation expense. $($Hint: Assume no change in salvage value.$)$

E$8-43.$ Computing and Assessing Plant Asset Impairment $($FSET$)$

Using the information from E$8-42,$ show how the entries in parts $b$ and $c$ affect Zeibart Company's balance sheet and income statement by using the financial statement effects template.