Question

Sanders Corporation operates a factory in Arizona. Due to a change in business climate an impairment...

Sanders Corporation operates a factory in Arizona. Due to a change in business climate an impairment test is deemed appropriate. Management has acquired the following information:

Cost $243,000,000

Accumulated depreciation 112,000l,000

Estimate of the total undiscounted

future cash flows 110,000,000

Present value of estimated

future cash flows 94,000,000

Estimated fair value of the Arizona

factory, as appraised 90,000,000

Required:

a) Determine the amount of the impairment loss if any.

b) If a loss is indicated, prepare the entry to record the loss.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Sanders Corporation operates a factory in Arizona. Due to a change in business climate an impairment...
Sanders Corporation operates a factory in Arizona. Due to a change in business climate an impairment test is deemed appropriate. Management has acquired the following information: Cost $243,000,000 Accumulated depreciation 112,000,000 Estimate of the total undiscounted future cash flows 110,000,000 Present value of estimated future cash flows 94,000,000 Estimated fair value of Arizona factory, as appraised 90,000,000 Required: a) Determine the amount of the impairment loss if any. b) If a loss is indicated, prepare the entry to record the...
Chadwick Enterprises, Inc., operates several restaurants throughout the Midwest. Three of its restaurants located in the...
Chadwick Enterprises, Inc., operates several restaurants throughout the Midwest. Three of its restaurants located in the center of a large urban area have experienced declining profits due to declining population. The company’s management has decided to test the assets of the restaurants for possible impairment. The relevant information for these assets is presented below. Book value $ 7.1 million Estimated undiscounted sum of future cash flows 4.3 million Fair value 3.8 million Required: 1. Determine the amount of the impairment...
In? 2011, ZeeTee Inc. acquired production machinery at a cost of $ 650 comma 000?, which...
In? 2011, ZeeTee Inc. acquired production machinery at a cost of $ 650 comma 000?, which now has a accumulated depreciation of $ 390 comma 000. The undiscounted cash flows from use of the machinery is $ 230 comma 000. and? it's fair value is $ 199 comma 000. What amount should Condor recognize as a loss on? impairment?
Collinsworth LTD., a U.K. company, prepares its financial statements according to International Financial Reporting Standards. Late...
Collinsworth LTD., a U.K. company, prepares its financial statements according to International Financial Reporting Standards. Late in its 2021 fiscal year, a significant adverse change in business climate indicated to management that the assets of its appliance division may be impaired. The following data relate to the division’s assets: (£ in millions) Book value £ 290 Undiscounted sum of estimated future cash flows 280 Present value of future cash flows 206 Fair value less cost to sell (determined by appraisal)...
Sanders Company purchased the following on January 1, 2019:    • Office equipment at a cost of...
Sanders Company purchased the following on January 1, 2019:    • Office equipment at a cost of $53,000 with an estimated useful life to the company of three years and a residual value of $15,900. The company uses the double-declining-balance method of depreciation for the equipment. • Factory equipment at an invoice price of $782,000 plus shipping costs of $32,000. The equipment has an estimated useful life of 110,000 hours and no residual value. The company uses the units-of-production method of...
3. Exchange Intelligent Corporation recently acquired new semiconductor assembly equipment to be used in its production...
3. Exchange Intelligent Corporation recently acquired new semiconductor assembly equipment to be used in its production process. Intelligent Corporation traded in old semiconductor equipment that had an original cost of $300,000 and accumulated depreciation on the date of the exchange of $225,000. The fair value of the old equipment is $85,000. In addition, Intelligent Corporation signed a promissory note to pay $200,000 in three years plus interest at a market interest rate of 6%. What is the cost recorded for...
Question 5 (8 marks) Agora Corporation, a private Canadian entity using ASPE, has factory equipment that...
Question 5 Agora Corporation, a private Canadian entity using ASPE, has factory equipment that has a cost of $5,000,000 and accumulated depreciation of $1,200,000. A change of operations has resulted in this equipment not being fully utilized. A review indicates that future net cash inflows from its use will be approximately $3,000,000 undiscounted and $2,800,000 discounted. The current market value of similar equipment is about $2,400,000. Required a) Determine if there is an asset impairment. Explain your reasoning. b) Assuming...
Anthara Corporation had a machine whose Book value at the end of 2003 was $ 16,000...
Anthara Corporation had a machine whose Book value at the end of 2003 was $ 16,000 and a Building with Book value of $ 40,000. The undiscounted future cash flows from the Machine and the Building were estimated as $ 10,000 and $ 41,000 respectively. The fair market values of the machine and the Building were $ 9,000 and $39,000 respectively. How much should Anthara report as impairment loss for the machine and for the building in 2003?
Mains Corporation owns equipment with a cost of $290,000 and accumulated depreciation at December 31, 2017...
Mains Corporation owns equipment with a cost of $290,000 and accumulated depreciation at December 31, 2017 of $150,000. It is estimated that he machinery will generate future cash flows of $165,000. The machinery has a fair value of $115,000. Mains should recognize a loss on impairment of
Arizona Corp. acquired the business Data Systems for $290,000 cash and assumed all liabilities at the...
Arizona Corp. acquired the business Data Systems for $290,000 cash and assumed all liabilities at the date of purchase. Data’s books showed tangible assets of $280,000, liabilities of $13,000, and stockholders’ equity of $267,000. An appraiser assessed the fair market value of the tangible assets at $280,000 at the date of acquisition. Required a. Compute the amount of goodwill acquired. b. Record the acquisition in a financial statements model. Arizona Corp.’s financial condition just prior to the acquisition is shown...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT