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

question 61

Essay

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 31,2016,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.

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Definitions:

Corporate Securities

Financial instruments such as stocks and bonds issued by corporations to raise capital.

Professional Corporation

A type of corporate entity for which many states offer incorporation options, designed for professions where the practitioners require a license, like doctors or lawyers.

Law Firm

A business entity formed by one or more lawyers to engage in the practice of law, providing legal services to clients.

Privately Owned

Properties or businesses that are owned by individuals or corporations rather than by the government or public.