On december 31 year three fairfields auditors raise

Assignment Help Accounting Basics

Reference no: EM13602797

On December 31, Year Three, Fairfield's auditors raise concerns that the plant's market value might be below its net book value due to the failure of the Jphone to gain market share. The auditors believe this decline is permanent and decide to test for impairment. The accountants and auditors agree that the plant will generate net cash flows of approximately $2 million each year but only for the next fifteen years. Perform a test of recoverability on the plant. Assume that the auditors determine that the plant's expected future cash flows are below its net book value. The company must now perform the fair value test. Several appraisers are called in, and the average fair value is $15,600,000. Determine if Fairfield must record an impairment loss and, if so, determine the amount.

Reference no: EM13602797

Questions Cloud

A software development process that was characterized as a : a software development process that was characterized as a series of prototyping efforts with an emphasis on risk

First state bank paid interest to levi co on a certificate : 1.beth mays purchased an automobile from mills bros. auto sales for 9000.2.bill becham loaned 15000 to the business in

Flagler company allocates overhead based on machine hours : flagler company allocates overhead based on machine hours. they estimated overhead costs for the year to be 420000.

Executives of studio recordings inc produced the latest : executives of studio recordings inc produced the latest compact disc by the starshine sisters band titled

On december 31 year three fairfields auditors raise : on december 31 year three fairfields auditors raise concerns that the plants market value might be below its net book

The group product manager for ointments at american : the group product manager for ointments at american therapeutic corporation was reviewing price and promotion

Kaye company acquired 100 of fiore company on january 1 : kaye company acquired 100 of fiore company on january 1 2009. kaye paid 1000 excess consideration over book value which

Market prices are 1035 for bonds 19 for preferred stock and : market prices are 1035 for bonds 19 for preferred stock and 35 for common stock. there will be sufficient internal

The followin transactions were incurred by dimasi : the followin transactions were incurred by dimasi industries during january 2010 1. issued 800000 of direct material

User Account

All Pages