C-Stop Reports the Following Information at Year-End: Based on the Above

question 100

Multiple Choice

C-Stop reports the following information at year-end: Based on the above information,what is the total amount of impairment loss that C-Stop should record at year end?

• A)$141,000.
• B)$126,000.
• C)$123,000.
• D)$122,000.The building and the copyright are impaired since their estimated future cash flows are less than book value.The impairment loss is calculated as the difference between the book value and the fair value: Building ($500,000 - $360,000)= $140,000 and Copyright (40,000 - $39,000)= $1,000.Total impairment loss ($140,000 + $1,000)= $141,000.

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Definitions:

Probability

The measure of the likelihood that an event will occur, often expressed as a number between 0 and 1.

NORM.DIST

A function in software packages, such as Excel, used to calculate the normal distribution of a set of data.

Point Estimate

A single value estimate that serves as the best guess or most likely value for a population parameter based on sample data.

Population Parameter

A numerical value that characterizes a certain aspect of a population, such as its mean or standard deviation.