Your company rents out computers to local businesses and schools - 10262

Solution Posted by
yousafbhutta

yousafbhutta

Rating : (28)C
Solution Detail
Price: $1.50
  • From: Business,
  • Posted on: Wed 23 May, 2012
  • Request id: None
  • Purchased: 0 time(s)
  • Average Rating: No rating
Request Description

 

Your company rents out computers to local businesses and schools. You have 1,600 computers with a net book value of $163,000. 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 The fair value of the computers is estimated to be $123,500 because of their outdated technology. Your company should report an asset impairment loss of:

 

 

 

$123,500.

$0

$163,000.

$39,500.

 

 

 

 

 

 

 

 

 

Solution Description

 

Your company rents out computers to local businesses and schools. You have 1,600 computers with a net book value of $163,000. 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 The fair value of the computers is estimated to be $123,500 because of their outdated technology. Your company should report an asset impairment loss of:

 

 

 

Attachments
Question no.14.docx
Question no.14....