TBB Corp. has the following information regarding three of its assets: Estimated Book Value Cash Flows Fair Value Equipment $ 35,000 $ 36,000 $ 30,000 Building $ 68,000 $ 70,000 $ 65,000 Patent $ 30,000 $ 28,000 $ 26,000

TBB Corp. has the following information regarding three of its assets: Estimated Book Value Cash Flows Fair Value Equipment $ 35,000 $ 36,000 $ 30,000 Building $ 68,000 $ 70,000 $ 65,000 Patent $ 30,000 $ 28,000 $ 26,000

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter8: Investing Activities

Section: Chapter Questions

Problem 1.3AIC: Estimate the average total estimated useful life of depreciable property, plant, and equipment....

See similar textbooks

Related questions

Q: The following information relates to Equipment and related accounts of DJ Khaleed Inc: Equipment,…

A: Depreciation is the amount that is deducted from the cost of a fixed asset to arrive at the asset’s…

Q: Proceeds on Disposal of Assets, R47 000 & R43 000 and a new asset bought in replacement of the 2…

A: Statement of cash flows: The statement of cash flows records all the sources and use of the cash in…

Q: A company has the following three assets with the information provided:($ in millions)…

A: Impairment occurs when the estimated total future cash flows is less than the book value of the…

Q: 1. The Judi Company purchased another entity for P8,000,000 cash. A schedule of the fair value of…

A: Goodwill refers to the value of the intangible assets which is linked or associated with the…

Q: Cash-generating unit (adopted from Wiley publication) Sydney Ltd reported the following assets in…

A: Impairment loss is the reduction in the carrying value of assets that is mainly because of a decline…

Q: Kenoly Corporation owns a patent that has a carrying amount of $300,000. Kenoly expects future net…

A: Calculate the loss on impairment:

Q: Hearts Company has various cash generating units. One cash generating unit has the following…

A: As given , we need to determine amount of impairment loss . Value in use as determined by management…

Q: At December 31, 2022, Cheyenne Corporation reported the following plant assets. Land $…

A: Purchase of assets [Land, equipment and building] would be recorded with debit entry to particular…

Q: Spuds Co. bought a manufacturing facility for $1,200,000. The facility included land valued at…

A: The cost assigned to the equipment = $1,200,000$700,000+$400,000+$200,000×$200,000 =…

Q: Prepare journal entries to record the 2011 amortization expense. Prepare journal entries to record…

A: Intangible assets: Assets that do not have any physical existence but they can be measured in…

Q: TBB Corp. has the following information regarding three of its assets: Estimated Book Value Cash…

A: Asset impairment can be defined as those assets that have a market value which is less than the…

Q: then the original cost of the plant asset must have been what?

A: Original Cost of Plant asset is the amount paid at the time of acquisition of plant and the amount…

Q: Bronze Company operates a production line which is treated as a cash generating unit. At year end,…

A: SOLUTION- NON CURRENT ASSETS ARE THE ASSETS WHOSE BENEFITS WILL BE REALIZED OVER MORE THAN ONE YEAR…

Q: Turquoise Ltd started its operations with $25,700 in cash with the issue of common stock dated Jan…

A: Cost of the Asset = $ 25,700 Useful Life = 4 years Salvage Value = $ 4,500 Formula for Straight…

Q: Zenith Corporation sells some of its used store fixtures. The acquisition cost of the fixtures is…

A: CASH FLOW FROM INVESTING ACTIVITY SHOWS THE AMOUNT OF CASH RECEIVED OR SPENT RELATED TO COMPANY LONG…

Q: Financial Statement Presentation Vera Corp. reported the following amounts for the year just ended:…

A: Property, Plant, and Equipment include tangible assets, that can be touched and seen. For example -…

Q: Salam Air has the following assets: Coalculate the amount of tangible assets: Building and Equipment…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: The following breakdown of the MNO Corporation's property, plant and equipment and bonds payable is…

A: Cash flow from investing activities: It is a section of the cash flow statement that shows the cash…

Q: Flanagan Concrete owns equipment with a book value of $3,500,000. The equipment is estimated to…

A: Impairment loss = Carrying value of the assets - Recoverable value of the assets where, The…

Q: Sylvia Company has a long-term plant asset with the following information as of the end of the year:…

A: When fair value of asset is reduced/declined lower than its carrying value then the difference value…

Q: Kenoly Corporation owns a patent that has a carrying amount of $300,000. Kenoly expects future net…

A: Impairment loss = Carrying value of the assets - Recoverable value of the assets where, Recoverable…

Q: t December 31, 2022, Windsor, Inc. reported the following plant assets. Land $ 3,870,000…

A: Journal: Recording of a business transactions in a chronological order.

Q: (a) The entity sold some tangible non-current assets, which had a net book value of $200 million.…

A: Cash flow statement forms a part of financial statements and is prepared with a view to show the…

Q: Kiwi Co. purchased another entity for P5,000,000 cash. The carrying amount and fair value were…

A: Goodwill is an intangible asset of a company which exists due to the company’s customer base, brand…

Q: Toro Co. has equipment with a carrying amount of$700,000. The expected future net cash flows from…

A: Generally Accepted Accounting Principles (GAAP): These are the guidelines necessary to create…

Q: 51. SALAM Company purchased equipment having an invoice price of $11,500. The terms of sale were…

A: Hello. Since your question has multiple parts, we will solve the first question for you. If you want…

Q: Kiwi Co. purchased another entity for P5,000,000 cash. The carrying amount and fair value were…

A: Consolidation is the merger of two or more entities where one large company acquire share capital of…

Q: PETRON Corporation sold a fixed asset for P100,000, which was also its book value. This is A. an…

A: Hey, since there are multiple questions posted, we will answer first question. If you want any…

Q: Alou Corporation reported the following information at year-end: Вook Value Estimated Fair Value…

A: ANSWER Here the question is asked to find total amount of impairment loss that Alou should record at…

Q: #1 Jones Co. in a lump-sum purchase, bank note for $2,000,000 and used cas COS ASSET Land $300,…

A: Under lumpsum sale, all the assets and liabilities are transferred for one single consideration…

Q: The information regarding the fixed assets of Broadwing Company as of December 31, 2019 is provided…

A: Impairment loss: It can be defined as a fall or reduction in the carrying value of an asset as a…

Q: Hager Company sold some of its plant assets during 2021. The original cost of the plant assets was…

A: Book value of plant assets = $900,000 - $840,000 = $60,000 Gain on sale of plant assets = $90,000 -…

Q: GRACE Co. recently acquired two items of equipment. Acquired a press at an invoice price of…

A: In the given question, we were given two equipment, one of which is a press machine and the other is…

Q: Maxwell paid cash of $2,700,000 for this investment which gave them significant influence over…

A: Answer a. Acquisition Price 2,700,000 Less: Book Value Acquired…

Q: 7. A company purchased a POS cash register on January 1 for RMS,400. This register has a useful life…

A: Double Declining Balance Method:-it is the accelerated depreciation method, it calculates expenses…

Q: Iris Company purchased another entity for P8,000,000 cash. The assets and liabilities of the acquire…

A: Calculation of fair value of net identifiable assets : Particulars Amount Cash P1,000,000…

Q: Distressed Corporation is undergoing liquidation. Relevant information as of January 1, 20x1 is…

A: At the time of liquidation of partnership the assets are sold and the liabilities are paid off.

Q: Garcia Co. owns equipment that costs $76,800, with accumulated depreciation of $40,800. Garciasells…

A: Whenever business sells fixed assets to any other party, then gain or loss on sale will be…

Q: Accounting Karen Company provides the following balances at the end of 2018? Mineral Deposit, cost…

A: Before calculating the earnings available for dividends, depreciation must be deducted, much as…

Q: One of the companies purchased a set of fixed assets for an amount of 12 million dinars in cash. The…

A: Journal is a primary book where transactions are originally recorded. Further, a journal entry is…

Q: Platteville Corporation has the following account balances at 12/31/20: Amortization expense P…

A: As per IAS 38 , if below mentioned twin conditions are satisfied , intangible asset will be…

Q: In 20x7, Sweet Treats sold a piece of equipment with a purchase value of $371,000and acumulated…

A: Cash flow from investing activities: It is a section of the cash flow statement that shows the cash…

Q: TBB Corp. has the following information regarding three of its assets: Estimated…

A: Impairment refers to a downfall in the value of an asset (Fixed/ Intangible). Impairment occurs from…

Q: S Company had the following balances at the time it was acquired by P Company: Cash…

Q: At December 31, 2022, Concord Corporation reported the following plant assets. Land $ 3,640,000…

A: A journal entry is a form of accounting entry that is used to report a business transaction in a…

Q: s 23,265,675 3,474,325 Equipment 78,040,000 Less: Accumulated depreciation—equipment…

A: The transaction is given as,

Q: YOU CAN DO IT Corporation has equipment with a carrying value of 450,000 on December 31, 2021. The…

A: Solution: An impaired asset is asset which is having market value less than amount listed on balance…

Question

TBB Corp. has the following information regarding three of its assets:

		Estimated
	Book Value	Cash Flows	Fair Value
Equipment		$	35,000	$	36,000	$	30,000
Building		$	68,000	$	70,000	$	65,000
Patent		$	30,000	$	28,000	$	26,000

What amount of loss should be recorded by TBB due to asset impairment?

Select one:

a. $4,000

b. $7,000

c. $12,000

d. $10,000

e. $6,000

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

TBB Corp. has the following information regarding three of its assets: Estimated Book Value Cash Flows Fair Value Equipment $ 100,000 $ 106,000 $ 90,000 Building $ 200,000 $ 250,000 $ 195,000 Patent $ 50,000 $ 58,000 $ 36,000 What amount of loss should be recorded by TBB due to asset impairment?
Presented below is information related to Wolfie Corp.’s equipment on 12/31/2022: Description Amount Capitalized cost $900,000 Accumulated depreciation to date 750,000 Estimated residual value 40,000 Expected future cash flows 125,000 Estimated Fair value 100,000 The amount of the impairment loss, if any, that Wolfie Corp. should record on 12/31/22 is: $45,000 $50,000 $10,000 $20,000 $25,000 There is no impairment.
The following information is available relating to a cash generating unit belonging to Bliss plc: £m Building 60 Plant and Equipment 12 Goodwill 20 Current Assets 40 132 Following an industrial accident, it has been determined that the recoverable amount of the cash generating unit to be £100m. The current assets are already at their recoverable amount. Determine the impairment loss relating to this Cash Generating Unit. Allocate the impairment loss to the cash generating unit, and show the value of each of the assets listed above once the impairment loss has been allocated.
Platteville Corporation has the following account balances at 12/31/20: Amortization expense P 10,000 Trademark 80,000 Research and Development costs 100,000 Patent, net of P30,000 amortization 70,000 What amount should Platteville report for intangible assets on the 12/31/20 statement of financial position? 100,000 150,000 250,000 260,000
Bovine Ltd. has the following assets in a CGU: Carrying Value (thousands) Equipment $ 861 Building 2,009 Land 1,170 Goodwill 200 $ 4,240 The recoverable amount has been determined to be $3,340. The separate fair value less costs of disposal for land is $1,070; no other assets could be separately valued.Required:1. Allocate the impairment loss to individual assets and calculate the net book value of each asset after the impairment. (Enter answers in thousands of dollars.) 2. Assume that the recoverable amount recovered to $3,540 in the subsequent year. Allocate the impairment reversal to individual assets and calculate the net book value of each asset after the impairment. The separate fair value less costs of disposal for land remains at $1,070. There is no concern with a ceiling value when assigning the recovery to building or equipment. (Enter answers in thousands of dollars.)
Presented below is information related to equipment owned by Sanabel Co. at December 31, 2018 Cost $4,500,000 600,000 Accumulated depreciation to date Expected future net cash flows 3,500,000 Fair value 2,700,000 4 years Remaining useful life Salvage value 100,000 Cost of disposal Assuming the equipment is held for disposal . The impairment loss on December 31 2018 will amount to a $ 0 1.200.000 $1.170.000 d 1.230.000
Bovine Ltd. has the following assets in a CGU: Carrying Value (thousands) Equipment $ 861 Building 2,009 Land 1,170 Goodwill 200 $ 4,240 The recoverable amount has been determined to be $3,340. The separate fair value less costs of disposal for land is $1,070; no other assets could be separately valued.Required:1. Allocate the impairment loss to individual assets and calculate the net book value of each asset after the impairment. (Enter answers in thousands of dollars.) Bovine Ltd. has the following assets in a CGU: Carrying Value (thousands) Equipment $ 861 Building 2,009 Land 1,170 Goodwill 200 $ 4,240 The recoverable amount has been determined to be $3,340. The separate fair value less costs of disposal for land is $1,070; no other assets could be separately valued.Required:1. Allocate the impairment loss to individual assets and calculate the net book value of each asset after…
Sylvia Company has a long-term plant asset with the following information as of the end of the year: Net book value $87,200 Estimated future cash flows $68,000 Fair Value $60,000 The amount of the impairment loss is: A. $155,200 B. $19,200 C. $8,000 D. $27,200
Alou Corporation reported the following information at year-end: Вook Value Estimated Fair Value Cash Flows Building $ 522,000 $ 396,000 $ 375,000 Patent 51,000 $ 56,000 $ 50,000 Copyright $ 56,000 $ 54,000 $ 52,000 Machine $ 116,000 $ 136,000 $ 98,000 Based on the above information, what is the total amount of impairment loss that Alou should record at year-end? $159,000. $151,000. $155,000. $158,000. %24
The following information is available for a Company's asset: Cost $5,350,000; Carrying amount (book value) $3,200,000; Undiscounted future cash flows 2,150,000, fair value or market value $2,600,000. Regarding this asset, the company would record a loss on impairment of OLO0.000 OBE00.000 OL 1000.000
Topic: Impairment of Asset Uranus Company has various cash generating units. On December 31,2014, one cash generating unit has the following carrying amount of assets: Cash 600,000 Inventory 1,400,000 Land 2,500,000 Plant and equipment 9,000,000 Accumulated depreciation 1,500,000) Goodwill 1,000,000 Carrying amount 13,000,000 The management determined the value in use of the cash generating unit at P8,500,000. The fair value less cost of disposal for the inventory was greater than the carrying amount. Required: Prepare journal entry to recognize the impairment loss.
Dickinson Inc. owns the following assets. Asset Cost Salvage Estimated Useful Life A $70,000 $7,000 10 years B 50,000 5,000 5 years C 82,000 4,000 12 years Compute the composite depreciation rate and the composite life of Dickinson’s assets.