Due to increased competition from low-cost foreign manufacturers, Genevive's Toy Company is experiencing significant declines in sales. The company produces its toys from an assembly line. The equipment in this assembly line has not been previously revalued or impaired. For the year ending December 31, 2010, the controller gathered the following information relating to the assembly line equipment, which is considered to be a cash generating unit:
Required:
Determine whether the assembly line is impaired, and if so, the amount of the impairment.

Question

Due to increased competition from low-cost foreign manufacturers, Genevive's Toy Company is experiencing significant declines in sales. The company produces its toys from an assembly line. The equipment in this assembly line has not been previously revalued or impaired. For the year ending December 31, 2010, the controller gathered the following information relating to the assembly line equipment, which is considered to be a cash generating unit:
  Required:
Determine whether the assembly line is impaired, and if so, the amount of the impairment.

Quizplus · Accepted Answer

The Answer of Due to increased competition from low-cost foreign manufacturers, Genevive's Toy Company is experiencing significant declines in sales. The company produces its toys from an assembly line. The equipment in this assembly line has not been previously revalued or impaired. For the year ending December 31, 2010, the controller gathered the following information relating to the assembly line equipment, which is considered to be a cash generating unit:
  Required:
Determine whether the assembly line is impaired, and if so, the amount of the impairment.

Due to Increased Competition from Low-Cost Foreign Manufacturers, Genevive's Toy