Top Menswear, Ltd. reported net plant and equipment of $1,616,000. These assets cost $2,512,000 with accumulated depreciation taken to date of $896,000. Based on recently assessed negative evidence, Luke Top's management concluded that its plant assets might be impaired. Luke Top estimates total expected future cash flows from the use of the assets as only $1,310,000 and appraises the fair value of the assets at $1,022,000. Are the company's assets impaired? If there is an impairment loss, prepare the journal entry necessary to record the impairment.

Conduct the impairment test for plant and equipment at the end of the year to determine whether Luke Top Menswear's assets are impaired. \begin{tabular}{ll} Step 1: & PlantandEquipment \\ \hline & \\ \hline & \\ \hline & \\ \hline Impairment Indicated & \\ \hline \end{tabular} Now, complete step 2 of the impairment test for plant and equipment. Select whether step 2 of the test is required on the first line. (If the test is not required, leave all remaining cells in that colu \begin{tabular}{l} Step 2: \\ \hline Step 2 required \\ Less: \\ Impairment Loss \end{tabular} Next, if there is an impairment loss, prepare the journal entry necessary to record the impairment. (Record debits first, then credits. Exclude explanations from any journal entries. If no entry is