Constructor Limited Estimated an Impairment Loss of $500 Against Its

question 5

Multiple Choice

Constructor Limited estimated an impairment loss of $500 against its single cash- generating unit. The company had the following assets: Headquarters Building $1000; Construction Plant $600; Equipment $400. The net carrying amount of the Equipment after allocation of the impairment loss is:

• A) $200
• B) $400
• C) $300
• D) $0

Calculate and understand the significance of return on common shareholders' equity.

Identify the roles and responsibilities of shareholders, board of directors, and management in a corporation.

Understand the concept of legal capital and its implications for shareholder distributions.

Calculate and interpret basic earnings per share.

---

Definitions:

Deadweight Loss

A loss of economic efficiency that can occur when the equilibrium for a good or service is not achieved or is not achievable through market means, often due to market failures or intervention.

Demand Curve

A visual display that illustrates the connection between a product's price and the amount consumers want to buy over a specified time frame.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied, usually illustrating an upward slope.

Equilibrium Quantity

is the quantity of goods or services supplied and demanded at the equilibrium price, where market demand equals market supply.