Exercise $11-30($Algo$)$ Impairment; property, plant, and equipment $[$LO$11-8]$

General Optic Corporation operates a manufacturing plant in Arizona. Due to a significant decline in demand for the product

manufactured at the Arizona site, an impairment test is deemed appropriate. Management has acquired the following information for

the assets at the plant:

Cost

Accumulated depreciation

$ $39\mathrm{.}5$ million

General's estimate of the total cash flows to be generated by selling the products

$ $14\mathrm{.}9$ million

manufactured at its Arizona plant, not discounted to present value

$$16\mathrm{.}4$ million

The fair value of the Arizona plant is estimated to be $$14\mathrm{.}5$ million.

Required:

Determine the amount of impairment loss.

If a loss is indicated, prepare the entry to record the loss.

& $4.$ Determine the amount of impairment loss assuming that the estimated undiscounted sum of future cash flows is $(3)$ $$15\mathrm{.}5$

million instead of $$16\mathrm{.}4$ million and $(4)$ $$24\mathrm{.}85$ million instead of $$16\mathrm{.}4$ million.

Complete this question by entering your answers in the tabs below.

Req $1$

Req $2$

Req $3$ and $4$

If a loss is indicated, prepare the entry to record the loss.

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Enter your answers in

millions rounded to $1$ decimal place $($i$.$e$.,5,500,000$ should be entered as $5\mathrm{.}5).$

Journal entry worksheet

$1$

If a loss is indicated, prepare the entry to record the loss.

Note: Enter debits before credits.