Collison and Ryder Company (C&R) has been experiencing declining market conditions for its sportswear division. Management decided to test the assets of the division for possible impairment. The test revealed the following: book value of division's assets, $53.0 million; fair value of division's assets, $42 million. (a) If the sum of estimated future cash flows generated from the division's assets, $56 million, what amount of impairment loss should C&R recognize? (b) If the sum of future cash flows generated is expected to be $48, what amount of impairment loss should be recognized?
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