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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)

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7 0
3 years ago
Speedster Bicycles, Inc., collects 25% of its sales on account in the month of the sale and 75% in the month following the sale.
elixir [45]

Answer:

Total cash collection= $257,500

Explanation:

Giving the following information:

Sales:

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April= $280,000

Speedster Bicycles, Inc., collects 25% of its sales on account in the month of the sale and 75% in the month following the sale.

<u>Cash collection April:</u>

Sales on account from April= 280,000*0.25= 70,000

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Total cash collection= $257,500

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3 years ago
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Answer:

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3 years ago
Blank addresses change depending on the cells you
Scorpion4ik [409]

Answer:

absolute addresses change depending on the cells you copy them to.

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Explanation:

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2 years ago
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matrenka [14]

Explanation:

The preparation of the end December Income statement for Cowboy Law Firm is presented below:

                                          Cowboy Law Firm

                                           Income statement  

Revenue  

Service Revenue $7,900

Total revenues $7,900 (A)

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Utilities expense $1,000

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