In 2011, Diller Company acquired production machinery at a cost of $860,000, which now has a book value of $380,000. The sum of undiscounted future cash flows from use of the machinery is $335,000, and its fair value is $290,000.
a. Determine if an impairment loss has occurred. Explain.
b. If an impairment loss has occurred, provide the journal entry to record the impairment loss.

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The Answer of In 2011, Diller Company acquired production machinery at a cost of $860,000, which now has a book value of $380,000. The sum of undiscounted future cash flows from use of the machinery is $335,000, and its fair value is $290,000.
a. Determine if an impairment loss has occurred. Explain.
b. If an impairment loss has occurred, provide the journal entry to record the impairment loss.

In 2011, Diller Company Acquired Production Machinery at a Cost