1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
soldi70 [24.7K]
2 years ago
14

King corporation owns machinery with a book value of $760,000. It is estimated that the machinery will generate future cash flow

s of $700,000. The machinery has a fair value of $560,000. King should recognize a loss on impairment of?
Business
1 answer:
Evgen [1.6K]2 years ago
4 0

Answer:

King should recognize a loss on impairment of $60,000

Explanation:

In terms of IAS 36, Impairement happens when the Carring Amount of an Asset is <em>Higher</em> than the Recoverable Amount of an Asset.

<u>Recoverable Amount</u>

Recoverable Amount is the Higher of :

(a) Assets Value In Use, and

(b) Fair Value Less Cost to Sell

therefore:

Assets Value In Use = $700,000

Fair Value Less Cost to Sell = $560,000

therefore Recoverable Amount is $700,000 ( higher)

<u>Carrying Amount</u>

Book Value = Carrying Amount = $760,000

<u>Impairement Anaylsis</u>

Carrying Amount ($760,000) > Recoverable Amount ( $700,000)

Recognised Imparement loss is $60,000 ($760,000- $700,000)

You might be interested in
On January 1, 2021, Hoosier Company purchased $940,000 of 10% bonds at face value. The bond market value was $985,000 on Decembe
qaws [65]

Answer:

1.

Dr Bonds 940,000

Cr Cash 940,000

Dr Fair Value adjustment 45,000

Cr Net Unrealized holding gains & losses 45,000

2.

Dr Fair Value adjustment 45,000

Cr Net Unrealized holding gains & Losses 45,000

3.

Dr Investment in bonds 985,000

Cr Discount on bond investment 45,000

Cr Cash 940,000

Explanation:

Hoosier Company Journal entries

1.

Dr Bonds 940,000

Cr Cash 940,000

Dr Fair Value adjustment 45,000

($985,000-$940,000)

Cr Net Unrealized holding gains & losses 45,000

2.

Dr Fair Value adjustment 45,000

Cr Net Unrealized holding gains & Losses 45,000

3.

Dr Investment in bonds 985,000

Cr Discount on bond investment 45,000

Cr Cash 940,000

8 0
3 years ago
You have been offered a project paying​ $300 at the beginning of each year for the next 20 years. What is the maximum amount of
Vitek1552 [10]

Answer:

The project is worth $2,738.57.

Explanation:

Giving the following information:

You have been offered a project paying​ $300 at the beginning of each year for the next 20 years. The rate of return is 9%.

To calculate the present value, first, we need to calculate the final value:

FV= {A*[(1+i)^n-1]}/i

A= annual pay= 300

n= 20

i= 0.09

FV= {300*[(1.09^20)-1]}/0.09

FV= $15,348.06

Now, we can calculate the present value:

PV= FV/(1+i)^n

PV= 15,348.06/1.09^20= $2,738.57

8 0
3 years ago
Prepare the issuer’s journal entry for each of the following separate transactions.a. On March 1, Atlantic Co. issues 51,000 sha
Shalnov [3]

Answer:

March 1

Account                                             Debit               Credit

Cash                                                 $323,000

Common Stock                                                         $153,000

Paid-In Capital in Excess

of Par Value                                                              $170,000

April 1

Account                                              Debit                Credit

Cash                                                 $87,000

Common Stock-no par value                                    $87,000

April 6

Account                                             Debit                 Credit

Inventory                                          $56,000

Common Stock                                                           $56,000

Machinery                                        $170,000

Paid-In Capital in Excess of

Common Stock                                                           $170,000

Note Payable                                                              $92,000

Cash                                                 $92,000

4 0
3 years ago
True or false. Your employer is responsible to make contributions, on your behalf, to the federal insurance contributions
AnnyKZ [126]

Answer:

yes it is true

I HOPE THIS HELPS

TAKE CARE

Explanation:

6 0
2 years ago
Sultan Services has 1.2 million shares outstanding. It expects earnings at the end of the year of $6.0 million. Sultan pays out
Kisachek [45]

Answer:

A) $60.00

Explanation:

to calculate the value of Sultan's stocks, we need to use the growing perpetuity formula:

stock price = dividend / (required return rate - growth rate)

  • dividend = ($6,000,000 x 60%) / 1.2 million shares = $3,600,000 / 1.2 million shares = $3 per share
  • required return rate = 10%
  • growth rate = 5%

stock price = $3 / (10% - 5%) = $3 / 5% = $60 per share

5 0
2 years ago
Other questions:
  • business processing company, trains all of its employees in handling customer calls. After the completion of the training, the c
    8·1 answer
  • Abbott Landscaping purchased a tractor at a cost of $30,000 and sold it three years later for $16,200. Abbott recorded depreciat
    15·1 answer
  • A doctor who charges his patient for a more expensive procedure than the one performed and then justifies it by saying "i didn't
    15·1 answer
  • Driver Products recently paid its annual dividend of $2, and reported an ROE of 15%. The firm pays out 50% of its earnings as di
    9·1 answer
  • In 1999, the Coca-Cola Company developed a vending machine that would raise the price of Coke in hot weather. Present a supply a
    13·1 answer
  • An asian buyer meets with a broker and asks to be shown homes. if she doesn't ask to see homes in areas with no asian residents,
    9·1 answer
  • The Sales Discounts Forfeited account ________. Select one: A. represents additional sales revenue B. is a contra Sales Revenue
    14·1 answer
  • (Tco 1) socially adept managers will have a knack for _____.
    11·1 answer
  • Companies like my​ gym, which seek to do business in new markets for manufacturing​ and/or marketing​ purposes, have many potent
    7·1 answer
  • Cash may not include:
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!