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Sunshine Corporation operates a manufacturing plant in Nevada. Due to a significant decline in demand for the product manufactured at the Nevada site, an impairment
Sunshine Corporation operates a manufacturing plant in Nevada. Due to a significant decline in demand for the product manufactured at the Nevada site, an impairment test is deemed appropriate. Management has acquired the following information for the assets at the plant: Cost $500,000; Accumulated depreciation $175,000; Sunshine's estimate of the total cash flows to be generated by selling the products manufactured at its Nevada plant, not discounted to present value $300,000. The fair value of the Nevada plant is estimated to be $255,000. The amount of impairment loss recognized should be: O $70,000. $50,000. $0. $25,000
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