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Rainbow [258]
2 years ago
11

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:_____.
A. $ 60,000.
B. $ 140,000.
C. $200,000.
D. $ -0-.
E. None of the other answers are correct.
Business
1 answer:
kogti [31]2 years ago
6 0

Answer:

C. $200,000.

Explanation:

The computation of the impairment loss is shown below:

= Book value of the machinery - fair value of machinery

- $760,000 - $560,000

= $200,000

Hence, the  impairment loss is $200,000

Therefore the correct option is c.

We simply applied the above formula so that the correct value could come

And, the same is to be considered

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Assume that market and book values are equal for current assets, current liabilities, and debt and other long-term liabilities.
melomori [17]

Answer:

Market- value Balance sheet

ASSETS

NON-CURRENT ASSETS                                                 $37,628

CURRENT ASSETS                                                           $11,274

TOTAL ASSETS                                                                $48,908

EQUITY AND LIABILITIES          

EQUITY (316.6*$103.39)=32,733.274                             $32,733

LIABILITIES

NON-CURRENT                                                                $10,419

CURRENT LIABILITIES                                                     $5,750

TOTAL EQUITY AND LIABILITIES                                   $48,908

Explanation:

b) Assets are extra by ($37,628.274 - $22,293) =$15335.27

7 0
2 years ago
Manufacturing costs include all of the following categories except ________. multiple choice
san4es73 [151]

Answer: administrative cost

Explanation:

3 0
1 year ago
Nabor industries is considering going public but is unsure of a fair offering price for the company. The firm's CFO has gathered
andreev551 [17]

Answer:

e. $3,892,587.08

Explanation:

The value of Nabor Industries entire company using the free cash flows can be determined by calculating the present value of all free cash flows that will be occurred in the future in the following manner:

Present value of 2004 free cash flow                            $176,991.15

200,000(1+13%)^-1

Present value of 2005 free cash flow                            $234,944

300,000(1+13%)^-2

Present value of 2006 free cash flow                            $277,220.06

400,000(1+13%)^-3

Present value of cash flows after 2006                         $3,203,431.86

((400,000(1+4%))/(13%-4%))*(1+13%)^-3

Value of Nabor Corporation                                            $3,892,587.07

So based on the above calculations, our answer is e. $3,892,587.08

8 0
3 years ago
When you pay a commission at the time you buy a mutual fun you are paying a
labwork [276]
The answer is D.......
5 0
3 years ago
A Japanese insurance company purchases U.S. government securities. From the perspective of the United States, the balance of tra
Helga [31]

Answer:

a. not change; improve

Explanation:

Balance of trade is the difference in value over a period of time between a country’s imports and exports of goods and services,  usually expressed in the unit of currency of a particular country (e.g., dollars for the United States, yen for the Japan).

Balance of payments record the receipts and payments of the residents of the country in their transactions with residents of other countries.

A Japanese insurance company purchases U.S. government securities. From the perspective of the United States, the balance of trade with Japan will not change and the balance of payments with Japan will improve.

7 0
2 years ago
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