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loris [4]
3 years ago
15

Chadwick Enterprises, Inc., operates several restaurants throughout the Midwest. Three of its restaurants located in the center

of a large urban area have experienced declining profits due to declining population. The company’s management has decided to test the assets of the restaurants for possible impairment. The relevant information for these assets is presented below.
Book value $ 7.5 million
Estimated undiscounted sum of future cash flows 4.5 million
Fair value 4.0 million
Required:
1. Determine the amount of the impairment loss. (Enter your answer in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5).)
2. Determine the amount of the impairment loss assuming that the estimated undiscounted sum of future cash flows is $7.8 million and fair value is $5.5 million.

Business
1 answer:
mario62 [17]3 years ago
8 0

Answer and Explanation:

The answer and workings can be viewed in the snapshot below:

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You are considering investing in a GM bond with 7 years to maturity. The face value of the bond is $1,000. The coupon rate is 6%
Lapatulllka [165]

Answer:

Price of bond is = $ 1057

Explanation:

As we know that;

Price of bond = C * [1-(1+r)∧-n] / r  +   F / (1+r)∧n

where C = periodic coupon payment = 1000 * 6%= 60

         F = Face value of bond = 1000

        r = yield to maturity = 5% = 0.05

        n = number of periods till maturity = 7 years

         Putting values;

              = 60 * [ 1- (1+ 0.05)∧-7 ]/ 0.05  +  1000 / (1+0.05)∧7

              = 60 * (0.2893 / 0.05) +   710

             =  60 * 5.786 +  710

              =  347.16 +710

              =  1057

6 0
3 years ago
If John made $23,562.55 in wages, and $2,679.32 cents in tips, what amount should he enter for his income when filling out his 1
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Answer:

Explanation:

$26,241.67

8 0
3 years ago
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Provincial Inc. reported the following before-tax income statement items: Operating income $ 520,000 Loss on discontinued operat
geniusboy [140]

Answer:

$176,800

Explanation:

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$520,000 × 34% = $176,800

Therefore Provincial would report $176,800 of income tax expense as a separately stated line item in the income statement because $520,000 is the operating income tax before-tax income statement items and 34% is the actual income rate.

4 0
3 years ago
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Cushman Company had $800,000 in sales, sales discounts of $12,000, sales returns and allowances of $18,000, cost of goods sold o
patriot [66]

Answer:

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We use sales returns and allowances, sales discounts and operating expenses to get net income.

5 0
3 years ago
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Ronch [10]

Answer:

e. Sunk cost.

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