Problem 2: Impairment of Goodwill and other assets The Taylor Company acquired Susan Corporation on January 1, 2014. As part of the acquisition, $2,000 in goodwill was recognized; this goodwill was assigned to the Taylor Internet Application reporting unit. In addition, equipment was acquired as part of this same transaction and recorded in Taylor's books at $2,400. The equipment is estimated to have a useful life of 8 years and zero salvage value. On December 31, 2017, the following information relative to the Internet Application reporting unit was assembled: TOTAL future cash flows expected to be generated by the Internet Application reporting unit: - $1,000 at the end of each year for the next 8 years. - Of this $1,000 in annual cash flow expected to be generated by the Internet Application reporting unit over the next 8 years, $200 per year (over the next 8 years) will be generated specifically by the equipment. Therefore, the equipment will generate $200 per year over the next 8 years. As stated, the total cash flow for the Interiet Application reporting unit is 51,000 per year. The appropriate interest rate is 10%. Assets and Liabilities of the Internet Application reporting unit on December 31, 2017: Company policy is to always test for the impaiment of Goodwill first because impairment testing for Goodwill is done annually. 1. What is the book value of the equipment prior to impairment testing? 2. What is the fair value of the equipment? 3. What is the estimated fair value of the reporting unit? 4. Is the reporting unit impaired? 5. What is the amount for implied Goodwill? 6. What is the amount of the Goodwill Impaiment loss? 7. Record the joumal entries for the goodwill impairment. 8. Is the equipment impaired? If so what is the joumal entry to record the impairment loss