Homework Answers
Solution:
- The correct answer is $ 1,41,000
Explanation:
Impairment loss is perceived when the estimated cash flows is less than book value.
and
- Impairment loss = book value - fair value
There is impairment loss just if there should be an occurrence of building and copyright as the estimated cash flows is not as much as book value.
accordingly,
For building ,
Impairment loss = $ 5,00,000 - $ 3,60,000 = $ 1,40,000
For copy right ,
Impairment loss = $ 40,000 - $ 39,000 = $ 1,000
Accordingly ,all out Impairment loss = $ 1,40,000 + $ 1,000 =$ 1,41,000
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