On January 1, 2012, Vallahara Company purchased machinery for $650,000, which it installed in a rented factory. It is depreciating the machinery over 12 years by the straight-line method to a residual value of $50,000. Late in 2016, because of increasing competition in the industry, the company believes that its asset may be impaired and will have a remaining useful life of 5 years, over which it estimates the asset will produce total cash inflows of $1,000,000 and will incur total cash outflows of $825,000. The cash flows are independent of the company's other activities and will occur evenly each year. Vallahara is not able to determine the fair value based on a current selling price of the machinery. Valahara's discount rate is 10%. Required: 1. Prepare schedules to determine whether, at the end of 2016, the machinery is impaired and, if so, the impairment loss to be recognized. 2. If the machinery is impaired, prepare the journal entry to record the impairment. 3. If Vallahara uses IFRS and determines that the fair value of the machinery is $290,000 and that it would cost $10,000 to sell the machine, how much would the company recognize as the impairment loss? 4. Assuming.that the recoverable amount of the machinery is determined to be $220,000 at the end of 2017, what entry will Vallahara make to record this increase in value under U.S. GAAP? Under IFRS