900,000 / 1/4 = liabilities
900,000 - liabilities - stockholder's equity
900,000/4 = 225,000
900,000 - 225,000 = 675,000
Answer:
The correct answer is temporary/earnings
Explanation:
The objective of the accounting closing is to evaluate the benefits or losses of a business activity. In other words, if the final result is positive, there is an increase in business equity, and if the final result is negative, there is a decrease in company equity.
Finally, in the accounting closing, a series of steps are carried out: the accounting regularization, the determination of the result, the closing of accounts and the presentation of annual accounts.
In conclusion, in the accounting cycle a period of time is contemplated and a set of operations and procedures are carried out in order to reflect the financial status of a company.
Solution:
The reporting unit's book value of $250 million meets the market value of $220 million.
Requirement 1:
Determination of implied fair value of goodwill:
Fair value of Center point, Inc. $220 million
Fair value of Center point’s net assets (excluding goodwill) 200 million
Implied fair value of goodwill $ 20 million
Measurement of impairment loss:
Book value of goodwill $62 million
Implied fair value of goodwill 20 million
Impairment loss $42 million
Requirement 2: If the operating unit's market valuation of 270 million dollars surpasses 250 million dollars, there is no depreciation risk.
