Use the Following Information for Questions

question 67

Multiple Choice

Use the following information for questions.
On January 1, 2011, Fredrichs Inc.purchased equipment with a cost of €3,060,000, a useful life of 12 years and no salvage value.The company uses straight-line depreciation.At December 31, 2011, the company determines that impairment indicators are present.The fair value less cost to sell the asset is estimated to be €2,600,000.The asset's value-in-use is estimated to be €2,365,000.There is no change in the asset's useful life or salvage value
-The 2011 income statement will report Loss on Impairment of

• A)€0.
• B)€205,000.
• C)€440,000.
• D)€460,000.

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Definitions:

Quantity

The amount or number of a product or service that is available or demanded in the market.

Economic Profits

The gap between a company's overall income and its combined direct and indirect expenses.

Long Run

A period where all inputs or factors of production can be varied by firms, allowing for the adjustment to changes in the market.

Technical Prowess

Refers to the expertise and superior skill set in handling technology and technical tasks.