Maple Inc. has the following information regarding its assets:
Estimated
Book Value Cash Flows Fair Value
Equipment $ 35,000 $ 30,000 $ 28,000
Building $ 68,000 $ 70,000 $ 65,000
Patent $ 30,000 $ 34,000 $ 32,000
What amount of loss should be recorded due to asset impairment?
A) $10,000.
B) $9,000.
C) $8,000.
D) $7,000.
Answer: D
Based on the information below, what amount of impairment loss would be reported?
Estimated
Asset Fair value cash flows Book value
Equipment $ 25,000 $ 36,000 $ 30,000
Truck $ 34,000 $ 45,000 $ 42,000
Building $ 135,000 $ 138,000 $ 140,000
A) $5,000.
B) $23,000.
C) $13,000.
D) $18,000.
Answer: A
Which of the following is not a reason why a company might prefer to report a liability as long-term rather than current?
A) It may cause the firm to appear less risky to investors and creditors.
B) It may increase interest rates on borrowing.
C) It may cause the company to appear more stable commanding a higher stock price for new stock listings.
D) It may reduce interest rates on borrowing.
Answer: B
