Based on the Following Information, What Is the Impairment Booked

question 54

Multiple Choice

Based on the following information, what is the impairment booked at December 31, 2021? $$\begin{array} { | l | r | } \hline \text { Cost } & \$ 750,000 \\\hline \text { Accumulated depreciation } & 300,000 \\\hline \text { Value in use (sum of discounted cash flows) } & 300,000 \\\hline \text { Fair value } & 200,000 \\\hline \text { Disposal costs } & 15,000 \\\hline\end{array}$$

• A)$150,000
• B)$185,000
• C)$300,000
• D)$450,000

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Definitions:

Unidentified Principal

A party in a transaction whose identity is not known to the other party, often in agent-principal relationships.

Disclosed Principal

A disclosed principal is a party whose identity is known by all involved parties at the time a transaction is entered into with an agent.

Undisclosed Principal

is a party in a contractual agreement whose existence and identity are not revealed to the third party at the time of contract formation, often in agency relationships.

Express Authorization

Directly stated or clearly indicated authority given for an action or procedure.