Use the Following Information for Questions

question 8

Multiple Choice

Use the following information for questions.
On January 1, 2011, Bingham Inc.purchased a patent with a cost €1,160,000, a useful life of 5 years.The company uses straight-line depreciation.At December 31, 2012, the company determines that impairment indicators are present.The fair value less cost to sell the patent is estimated to be €540,000.The patent's value-in-use is estimated to be €565,000.The asset's remaining useful life is estimated to be 2 years.
-Bingham's 2012 income statement will report Loss on Impairment of

• A)€0.
• B)€131,000.
• C)€156,000.
• D)€595,000.

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Definitions:

Short-Run Equilibrium

The price level and real GDP that result when the aggregate demand curve intersects the short-run aggregate supply curve.

Federal Funds Rate

The interest rate at which depository institutions lend reserve balances to other depository institutions overnight.

Price Stability

An economic condition in which prices remain largely stable, without rapid inflation or deflation.

Maximum Employment

A situation in which all available labor resources are being used in the most economically efficient way, one of the goals of economic policy.