Answer:
Total amount of impairment is $196,000
Explanation:
Given Data;
The question can be tabulated for easy understanding.
Book value Estimated cash flow Fair value
Building $ 578,000 $ 398,000 $ 387,000
Patent $ 53,000 $ 58,000 $ 50,000
Copyright $ 58,000 $ 56,000 $ 53,000
Machine $ 118,000 $ 138,000 $ 94,000
Total impairment loss = ?
If the estimated cash flow in Alou corporation is less than it's book value, then an impairment lost has occurred.
From the question given, the estimated cash flow of copyright and building are less than the book value. Therefore,
Total impairment loss = (578,000-387,000) + ( 58,000-53,000)
= 191000+ 5000
= $196,000
