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Sedaia [141]
2 years ago
8

On January 1, Year 1, Chertco acquired a patent for $500,000 and, using the straight-line method, began amortizing it properly o

ver its estimated useful life of 10 years. The asset has no residual value. At December 31, Year 4, a significant change in the business climate caused Chertco to assess the recoverability of the carrying amount of the patent. Chertco estimated that the undiscounted future net cash inflows from the patent would be $325,000 and that its fair value was $275,000. Accordingly, for the year ended December 31, Year 4, Chertco should recognize an impairment loss of :________.
a. $175,000
b. $50,000
c. $25,000
d. $0
Business
2 answers:
Evgen [1.6K]2 years ago
4 0

Answer:

c. $25,000

Explanation:

We recognize impairment loss when the Carrying Amount of an Asset is greater than its Recoverable Amount.

Recoverable Amount of an Asset is the Higher of Asset Fair Value and Value in use. The future cash shows represent value in use and these need to be discounted. Since they are not,  Recoverable Amount = $275,000

Carrying Amount of an Asset is  the Cost of the Asset less all depreciation charges to date of the impairment test, Carrying Amount = $300,000

Therefore, Impairment loss = $25,000 ($300,000 - $275,000)

posledela2 years ago
4 0
The answer is $ 25,000
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The central bank uses a ____________________ monetary policy to offset business related economic contractions and expansions? la
Kamila [148]

Answer:

d.countercyclical

Explanation:

The central bank uses a d.countercyclical monetary policy to offset business related economic contractions and expansions. This is because monetary policy is meant to offset the natural business cycle.

7 0
3 years ago
. Dolores used to work as a high school teacher for $40,000 per year but quit in order to start her own catering business. To bu
VladimirAG [237]

Answer:

The correct option is B

Explanation:

In order to compute the profit, the accountant consider the Explicit cost so,

Explicit Cost = Borrowed amount × Interest rate + Ingredients amount

                     = $30,000 ×  3% + $25,000

                     = $259,000

Where Revenue is $60,000

Profit = Revenue - Explicit Cost

        = $60,000 - $259,000

        = $34,100

Economic Profit is computed as:

Economic Profit = Total Profit - Implicit Cost

                          = $34,100 - $40,600

                          = - $6,500

where

Implicit Cost = Salary + Interest

                = $40,000 + ($20,000 × 3%)

                =  $40,000 + $600

                = $40,600

Therefore, Louis says profit is $34,100 and Greg says she lost $6,500

5 0
3 years ago
Dab Corporation was organized on January 1, Year 1. During Year 1, Dab had the following transactions relating to shareholders'
lisov135 [29]

Answer:

The total shareholders’ equity at the end of Year 1 is $487,400

Explanation:

The computation of the ending total shareholders’ equity is shown below:

= Common stock value in exchange of cash + net income + net holding gains - dividend paid

= $442,400 + $98,000 + $1,000 - $54,000

= $487,400

While calculating the ending balance of shareholder equity we added the net income, net holding gains and deducted the dividend paid to the common stock value amount

6 0
3 years ago
Calculate the values for each of the questions. Assume that in each country there are no taxes, international trade, or inflatio
Inessa [10]

Explanation:

a. The computation is shown below:

As we know that

Multiplier = 1 ÷ 1 - MPC

1.5  = 1 ÷ 1 - MPC

So, MPC is 0.3333

Now the real GDP is

= Multiplier × Government spending

= 0.3333 × $70 billion

= $105 million

So the change in real GDP is

= $105 million - $70 million

= $35 million

b. The computation is shown below:

As we know that

Multiplier = 1 ÷ 1 - MPC

Multiplier  = 1 ÷ 1 - 0.6

So, multiplier is 2.5

Now the real GDP is

= Multiplier × Government spending

= 2.5 × $16 billion

= -$40 million

c. As we know that

Real GDP = Multiplier × Government spending

$280 billion = Multiplier × $70 billion

So, the multiplier is 4

Now the MPC is

Multiplier = 1 ÷ 1 - MPC

4 = 1 ÷ 1 - MPC

So, the multiplier is 0.75

3 0
3 years ago
An incomplete life insurance application submitted to an insurer will result in which of these actions
Viefleur [7K]
No insurance coverage.
3 0
3 years ago
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