Your Company Rents Out Computers to Local Businesses and Schools

question 51

Multiple Choice

Your company rents out computers to local businesses and schools.You have 1,000 computers with a net book value of $160,000.As a result of changing technology,your computers are more difficult to rent so you must severely reduce your rental price,which causes a decrease in estimated future cash flows.The fair value of the computers is estimated to be $125,000 because of their outmoded technology.Your company should report an asset impairment loss of:

• A)$160,000.
• B)$125,000.
• C)$35,000.
• D)none of the above.

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Definitions:

Acute Stressors

Immediate and intense stress-inducing events or situations that are typically short-lived.

Social Readjustment Rating Scale

A scale that measures the stress level of individuals by assigning values to different life events.

Change-related Stress

Stress experienced as a result of adapting to new or changing circumstances or environments.

Holmes and Rahe

Refers to the Holmes and Rahe Stress Scale, a tool used to measure the stress load we carry, and predict the risk of becoming ill as a result.