Exercise $9\mathrm{.}9($Algo$)$ Write$-$Down of Impaired Assets $($LO$9-5,$ LO$9-8)$

For several years, one of Prestland Company$$s grocery stores has been unprofitable. At this time, management has not decided whether to close that location or do a major renovation effort and keep the store open. A note to Prestland$$s financial statements indicates that the company tests assets for impairment when circumstances indicate that the recoverable value of a plant asset may be less than its recorded book value.

Prestland$$s financial records indicate that the building where the store in question is located originally cost $$506,000,$ had an estimated useful life of $20$ years, and had an expected residual value of $$101,200.$ Straight$-$line depreciation was used for four years. Management estimates that today$$s current market value of the building is $$379,500,$ which it considers a reasonable approximation of its recoverable value.

Required:

a$.$ Determine the book value of the building before any adjustment for impairment has been made.

b$.$ Determine the impairment loss, if any, that you recommend be recorded.

c$1.$ What is the building$$s book value after your adjustment for impairment has been recorded?

c$2.$ Due to uncertainty about the future use of the building, management decides that the useful life should be reduced to a total of nine years $($depreciation for the first four years have already been recorded$),$ and the residual value should be reduced to $$60,720.$ What is the amount of depreciation for each succeeding year in the building$$s revised estimated life?