Question

Theta Co. is performing impairment testing on its warehouse conveyor system and has developed the following information with respect to the equipment (in millions):

• Cost: $9

• Net book value: $4.6

• Estimated future cash flows $3.95

• Fair value: $3.35

What, if any, impairment loss should Theta Co. report?

Multiple Choice

• $4.60 million.

• $0.65 million.

• $1.25 million.

• Zero. There is no impairment loss in this situation.

• $5.65 million.

Answer 1

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