QUESTION6 Accounting for impairment losses: Involves a two-step process to first

Question

QUESTION6 Accounting for impairment losses: Involves a two-step process to first test for impairment and then record the loss. Applies only to depreciable, operational assets Applies only to assets with finite lives O All of these QUESTION 7 Adding a refrigeration unit to a delivery truck that previously did not have this capability is an example of Repairs and maintenance. e Legal defense of intangible 3ssets. QUESTION 8 Aliance Products purchased equipment tha: cost s120,000. IE had an estimated useful life of four years and no residual value. The equipment was depreciated by the straight line method and was sold at the end of the third year of use for $25.000 cash. Allance shou'd record; A Rain of $5,000. A loss of 55.000. Neither a gan nor a loss since the computer was saia a: ts book value. Ncither a gan nor a oss since the gain would rot be recogrized. 10 pa QUESTION 9 of four years and no Prooucts ourcnas value, Ine cquioment aas oeprec ared by the straisnalire methed and was so a bt the ens of the seconaye pment tha coss $120.000 It had an est MacBook Air

Explanation / Answer

As per chegg policy , answer to the first question has been provided below.

Question 6 - Answer (A)

Reason -

Steps for the calculation of impairment loss.

Step 1

1 - Detect the circumstances that resulted in asset imapirment .

2 - Find the fair market value of the asset .

3 - Compare the fair market value to the carrying value of the asset .

4 - If the fair market is less than the cost of holding the asset ,the asset is impaired .

Step 2 - Record the impairment loss .

Therefore it can be concluded that accounting for impairment losses involve a two way process .

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