Current carrying value-impaired assets

Assignment Help Accounting Basics

Reference no: EM13256709

For several years, a number of Food Lion,Inc., grocery stores were unprofitable. The company closed, and continues to close, some of these locations. It is apparent that the company will not be able to recover the cost of the assets associated with the closed stores. Thus, the current value of these impaired assets must be written down.

A recent Food Lion income statement reports a$9.5 million charge against income pertaining to the write-down of impaired assets.

A. Explain why Food Lion must write down the current carrying value of its unprofitable stores.

B. Explain why the recent $9.5 million charge to write down these impaired assets is considered a noncash expense

Reference no: EM13256709

Questions Cloud

Define temperature the vapor pressure of water : Imagine a solution at 25 oC which contain 25.0 mL of ethanol (d = 0.800 g/mL) and 40.0g of water (d =1.00 g/mL). At this temperature the vapor pressure of water is 23.8 Torr and that of ethanol is 60.8 Torr.

Permanent endowment for scholarships : An alumnus of a small university donated $150,000 to establish a permanent endowment for scholarships. The first scholarships were awarded 5 years after the money was donated.

The body of knowledge for the profession : Why do all managers and supervisors need to have knowledge and skills related to Human Resource management?

Calculate the cost of leasing the equipment : Reynolds Corporation plans to purchase equipment at a cost of $3 million. The company's tax-rate is 30 percent and the equipment's depreciation would be $600,000 per year for 5 years.

Current carrying value-impaired assets : For several years, a number of Food Lion,Inc., grocery stores were unprofitable. The company closed, and continues to close, some of these locations.

Describe how to improve productivity : Describe how to improve productivity in non-hospital organizations e.g. American Heart Association, Lupus Foundation, Alzheimer’s Association.

What strategies could management employ to hedge : What strategies could management employ to hedge against this risk by buying or selling futures, call options or put options (i.e., for each derivative is it a buy or sell strategy?)?

Investing on project if funds are available : If fund were available, would you invest in one, both or neither project? Why?

Define what is the percentage ionization of the benzoic acid : what is the percentage ionization of the benzoic acid in the resulting solution. Ka(benz acid)=6.5 * 10^-5

User Account

All Pages