Reference no: EM132916865

Problem 1: Recognition of an asset impairment charge would occur when which of the following condition(s) is/are present:

a. the market value of the asset has significantly decreased

b. the company forecasts losses from the asset's continued use

c. adverse business conditions or legal matters have affected the asset

d. All of the above

Problem 2: Castle Corp. holds FVPL securities in its portfolio. The securities were purchased for $32,500 on January 1, 20x1. On December 31, 20x1, the company had an unrealized gain of $320. What impact will this have on Castle's financial statements?

a. net income will increase, assets and stockholders' equity not be affected.

b. net income will increase, assets and stockholders' equity will increase.

c. income statement will not be affected, assets and stockholders' equity will not be affected.

d. income statement will not be affected, assets and stockholders' equity will increase.