Question

The impairment loss on long-term plant assets equals:

Question 30 options:

	A) estimated future cash flows minus present value.
	B) net book value minus fair value.
	C) estimated future cash flows minus fair value.
	D) net book value minus estimated future cash flows.

Williamson Company declared and distributed a 10% stock dividend when it had 100,000 shares of $1 par value common stock outstanding. The market price per share of common stock was $50 per share when the dividend was declared. The journal entry to record the stock dividend would include a credit to:

Question 34 options:

	A) Paid-in Capital in Excess of Par—Common $490,000.
	B) Retained Earnings $100,000.
	C) Retained Earnings $10,000.
	D) Common Stock $100,000.

Answer 1

30) Impairment loss means writing off the asset's book Value to its actual recoverable amount. It is calculated by the following formula -

Impairment loss = net book value of asset - fair value of asset

Hence, the correct answer is B) net book value minus fair value.

34) the following entry shall be passed for stock dividend -

Hence, the correct answer is A) Paid in capital in excess of par-common $490,000.