Wicker Corporation Operates a Manufacturing Plant in California

Essay

Wicker Corporation operates a manufacturing plant in California. Due to a change in business climate, an impairment test is deemed appropriate. Management has acquired the following information for the assets at the plant:

Required:
1. Determine the amount of impairment loss, if any.
2. If a loss is indicated, where would it appear in Wicker's multiple-step income statement?
3. If a loss is indicated, prepare the entry to record the loss.
4. Repeat requirement 1 assuming that the estimated undiscounted sum of future cash flows is $27,000,000 instead of $30,000,000.
5. Repeat requirement 1 assuming that the estimated undiscounted sum of future cash flows is $34,000,000 instead of $30,000,000.