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Shkiper50 [21]
3 years ago
15

Kohlman Corporation owns machinery with a book value of $380,000. It is estimated that the machinery will generate future cash f

lows of $350,000. The machinery has a fair value of $280,000.
Kohlman should recognize a loss on impairment of:

a. $ -0-.
b. $ 30,000.
c. $100,000.
d. $ 70,000.
Business
1 answer:
Phantasy [73]3 years ago
8 0

Answer:

Option B: $30,000 Impairment Loss of Machinery

Explanation:

IAS 36 – Impairment of Assets states that an asset is considered to be impaired if the Carrying Amount of an asset is greater than the Recoverable Amount. Recoverable Amount of an asset is the higher of Fair Value less Cost to Sell and Value-in-Use.  

Fair value less cost to sell is defined as the amount receivable from sale of assets less the cost of disposal, whereas Value in Use is defined as the present value of future cash flows from using an asset,

In case of Kohlman Company, recoverable amount of Machinery will be $350,000 i.e. Value in Use (future cash flows) as it is greater than the Fair Value of Machinery. The book value of machinery $380,000 exceeds the recoverable amount of $350,000. Therefore, the asset is considered to impaired and must be written down by $30,000 ($380,000 - $350,000 = $30,000). The impairment loss is charged to profit and loss account.

Journal Entry to record impairment loss:

DR  Profit & Loss Account   $30,000

CR  Equipment             $30,000

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Answer:OPEN LISTING

Explanation:

Open listing is a term used in the Marketing of securities like bonds,stocks and other marketable securities and real estates, in this type of listing it is made open to all the brokers available who are ready to help facilitate the sale.

Compensation can only be paid to the Broker who first brings the buyer of the listing. A broker is compensated based on the amount made buy the owner of the listing.

6 0
3 years ago
Which of the following is the most likely explanation for the imposition of a price ceiling on the market for milk? a. Policymak
kozerog [31]

Buyers of milk, recognizing that the price ceiling is good for them, have pressured policymakers into imposing the price ceiling.

3 0
3 years ago
Select the correct answer.
Dima020 [189]

The correct option is A

<u>Explanation:</u>

Under the accrual basis of an accounting system, an expense has to be booked in the period in which it is incurred whether such an expense has been paid or not.

<u>The following Journal Entry will be passed in the books of accounts of a company: </u>

Wages account will be debited with an amount of 5000 and Wages Payable account will be credited with an amount of 50000

Thus, the correct answer will be option A from the given options.

5 0
3 years ago
Over the last two years, an american clothing company has partnered with a manufacturer in china to make clothes at a cheaper co
Trava [24]

The mutual benefit that the American Clothing Company derives by partnering with a Chinese Manufacturer comes because <u>E. It is</u> an example of counter-trading ...

<h3>What is Counter-trading?</h3>

Counter-trading occurs when goods or services are exchanged for other goods or services rather than for hard currency.  It is a reciprocal form of international trade in which, for example, the American Clothing Company brings in its technology while the Chinese Manufacturer provides cheap labor and other resources.

<h3>Answer Options:</h3>

A. It is a strategic alliance in which two countries share the risks and rewards of starting a new enterprise together in a foreign country.

B. It is a wholly owned subsidiary in which a foreign subsidiary is totally owned and controlled by an organization.

C. It is a greenfield venture in which owning the organization has been built from scratch.

D. It is an example of a franchise in which a company allows a foreign company to pay it a fee and a share of the profit in return for using the first company’s brand name and a package of materials and services.

E. It is an example of counter-trading in which the country is bartering for goods.

Thus, the counter-trade between these companies is mutually beneficial because of <u>Option E</u>.

Learn more about counter-trading at brainly.com/question/14659049

6 0
3 years ago
Which of the following is considered a source of general revenue in the Government-wide Statement of Activities?
TiliK225 [7]

Answer:

C) Sales Tax

Explanation:

The Government-wide Statement of Activities shows the revenues and expenses of the government and the general revenues indicate all the taxes, aid received from other governments and earnings from investments. According to that, the answer is that the option that is considered a source of general revenue in the Government-wide Statement of Activities is sales tax.

3 0
3 years ago
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