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ki77a [65]
2 years ago
6

Sheffield Corp. bought a machine on January 1, 2011 for $814000. The machine had an expected life of 20 years and was expected t

o have a salvage value of $82000. On July 1, 2021, the company reviewed the potential of the machine and determined that its future net cash flows totaled $408000 and its fair value was $273000. If the company does not plan to dispose of it, what should Sheffield record as an impairment loss on July 1, 2021
Business
1 answer:
Alja [10]2 years ago
3 0

Answer:

$156,700

Explanation:

Depreciation expense = [Cost-salvage value] /useful life

Depreciation expense = [814000 - 82000]/20

Depreciation expense = $36600

1 January 2011 - 1 July 2021 = 10.5 years . Total depreciation = 10.5 * $36600= 384,300

Book value as on 1 July 2021 = Cost - Accumulated depreciation

Book value as on 1 July 2021 = 814000-384300

Book value as on 1 July 2021 = 429700

Net realizable value = Lower of future cash flow or fair value

Lower of 408000 or 273000

Net realizable value = 273000

Now, since the Book value is more than net realizable value, Asset is impaired

Impairment loss = $273,000 - $429,700

Impairment loss = $156,700

Thus, Sheffield should record $156,700 as an impairment loss on July 1, 2021.

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6 0
2 years ago
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William ibbs, a professor at the university of california at berkeley, found that high project management maturity results in __
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William Ibbs, a professor at the university of California at Berkeley, found that high project management maturity results in lower direct costs of project management.

Project management is the process of directing the work of a team to achieve all project goals within given constraints. This information is typically documented in the project documentation created at the beginning of the development process. The main constraints are scope, time and budget.

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8 0
1 year ago
Words like denigrate, the undersigned, and expropriate are examples of high-level diction and should be used liberally in busine
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Answer:

False.

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Communication through business messages should convey the information in the simplest words so that the other party can easily understand what is being said. It also needs to be brief and to the point.

Using high level diction liberally in business communication leads to unclear messaging. The reader may not know the meaning of the words so the aim of communication will be defeated.

Also high level diction can have different meanings in different circumstances.

High level diction should be used sparingly, and simple diction is preferred.

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2 years ago
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b. Borrow $2,500

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8 0
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