Use the Following Information for Questions

question 83

Multiple Choice

Use the following information for questions.
On January 1, 2011, Dillman Inc.purchased a patent with a cost €3,480,000, 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 costs to sell the patent is estimated to be €1,620,000.The patent's value-in-use is estimated to be €1,695,000.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)€393,000.
• C)€468,000
• D)€1,695,000

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Definitions:

OCF

Operating Cash Flow, which represents the cash generated by a company's normal business operations.

Net Working Capital

The gap between a firm's short-term assets and liabilities, reflecting its immediate financial condition.

Cash Flow

The all-encompassing total of fund transactions in and out of a business, essentially shaping its liquid financial state.

Net New Equity

The difference between equity capital raised by issuing new shares and the equity capital repurchased or retired over a specific period.