El Dorado Foods Inc

question 131

Essay

El Dorado Foods Inc. owns a chain of specialty stores in the Pacific Northwest. Recently, four of the stores have experienced declining profits due to market saturation in the area. As a result, management gathered data about possible impairment of the assets of the stores. The information gathered was as follows:

Book value: $17.5 million
Fair value: $14.9 million
Undiscounted sum of future cash flows: $16.5 million

-Required:
Assume that the undiscounted sum of future cash flows is $18.2 million, instead of $16.5 million. Determine the amount, if any, of the impairment loss that El Dorado must recognize on these assets.

---

Definitions:

Early Christian Art

Early Christian art refers to the artwork produced by Christians in the first centuries following Jesus Christ's death, which includes symbols, frescoes, mosaics, and other decorations found in catacombs and churches.

Mausoleum

A large and stately tomb or building erected as a monumental burial place for the deceased, often of significant historical or architectural interest.

Galla Placidia

A Roman empress of the early 5th century, known for her political acumen, and for the construction of several architectural monuments in Ravenna, Italy.

Interior Mosaic Program

A decorative design in an interior space achieved through the use of small pieces of colored glass, stone, or other materials, assembled to form images or patterns.