Alou Corporation reported the following information at year-end: Based on the above information, what is the total amount of impairment loss that Alou should record at year end?
A) $141,000.
B) $126,000.
C) $123,000.
D) $122,000.

Question

Alou Corporation reported the following information at year-end:  Based on the above information, what is the total amount of impairment loss that Alou should record at year end?
A) $141,000. 
B) $126,000. 
C) $123,000. 
D) $122,000.

Quizplus · Accepted Answer

The building and the copyright are impaired since their estimated future cash flows are less than book value. The impairment loss is calculated as the difference between the book value and the fair value: Building ($500,000 ? $360,000) = $140,000 and Copyright (40,000 ? $39,000) = $1,000. Total impairment loss ($140,000 + $1,000) = $141,000.

Alou Corporation Reported the Following Information at Year-End: Based