Carli'sCarli's Domino Manufacturing Company learned that one of its cutting machines is obsolete. Although the company will...

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Accounting

Carli'sCarli's
Domino Manufacturing Company learned that one of its cuttingmachines is obsolete. Although the company will continue to usethis machinery in the? future, management believes that animpairment? write-down is required. The following informationrelates to the cutting? machine:
The firm estimates that the machine has a useful life of 10years and it has used it for four years. It has no salvagevalue.
Cost = $3,218,000
Accumulated Depreciation (up to the date of the impairment test)= $1,285,000
Total Estimated future cash flows = $1,234,000
Total Discounted future cash flows = $1,063,000
Estimated Fair Value = $1,044,000
Costs to sell = $8,000
Remaining Useful Life From the Impairment Date = 6 years
Requirements:
a.
Prepare the journal entry required to record the impairmentloss.
b.
Assuming that Carli's uses the? straight-line method with noresidual? value, prepare the journal entry to record the reviseddepreciation expense for the first year immediately following theimpairment.
c.
Assume that two years following the impairment? write-down, thefair value of the asset falls to $729,000. The sum of theundiscounted future cash flows is $753,000. What is the carryingvalue of the asset at this? time? Prepare any journal entrynecessary to reflect the change in fair value.

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a Computation of Assets Recoverable asset is as follows Assets Recoverable amount shall be greater of following 1 Estimated fair value less costs to sell asset have been given as 10440008000 1036000 2 Present Value of benefits for corporation is given as 1063000 If the group assets recoverable amount is less than carrying amount of group of assets then there is need to compute the See Answer

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Carli'sCarli'sDomino Manufacturing Company learned that one of its cuttingmachines is obsolete. Although the company will continue to usethis machinery in the? future, management believes that animpairment? write-down is required. The following informationrelates to the cutting? machine:The firm estimates that the machine has a useful life of 10years and it has used it for four years. It has no salvagevalue.Cost = $3,218,000Accumulated Depreciation (up to the date of the impairment test)= $1,285,000Total Estimated future cash flows = $1,234,000Total Discounted future cash flows = $1,063,000Estimated Fair Value = $1,044,000Costs to sell = $8,000Remaining Useful Life From the Impairment Date = 6 yearsRequirements:a.Prepare the journal entry required to record the impairmentloss.b.Assuming that Carli's uses the? straight-line method with noresidual? value, prepare the journal entry to record the reviseddepreciation expense for the first year immediately following theimpairment.c.Assume that two years following the impairment? write-down, thefair value of the asset falls to $729,000. The sum of theundiscounted future cash flows is $753,000. What is the carryingvalue of the asset at this? time? Prepare any journal entrynecessary to reflect the change in fair value.

a.	Prepare the journal entry required to record the impairmentloss.
b.	Assuming that Carli's uses the? straight-line method with noresidual? value, prepare the journal entry to record the reviseddepreciation expense for the first year immediately following theimpairment.
c.	Assume that two years following the impairment? write-down, thefair value of the asset falls to $729,000. The sum of theundiscounted future cash flows is $753,000. What is the carryingvalue of the asset at this? time? Prepare any journal entrynecessary to reflect the change in fair value.