ASSESSMENT CASE PAPER ANALYSIS / TUTORIALOUTLET DOT COM ASSESSMENT CASE PAPER ANALYSIS / TUTORIALOUTLET DO | Page 14
B. $45,000
C. $56,000
D. $63,000
2. A company leases trucks and properly classifies the leases into
capital leases. The
leases have a ten-year term and the lease calculations were done three
years ago when
interest rates were lower. Which of the following is the appropriate
accounting
treatment, if any, for the application of the fair value option to lease
transactions?
A. Leases are not eligible for the fair value option.
B. Recognize the change to fair value accounting with a cumulative
adjustment to
beginning retained earnings.
C. Recognize the change to fair value accounting with an unrealized
loss in the
income statement.
D. Recognize the change to fair value accounting with an unrealized
loss in
accumulated other comprehensive income.
3. An asset group is being evaluated for an impairment loss. The
following financial
information is available for the asset group:
Carrying Value:
$100,000,000
Sum of the undiscounted cash flows
95,000,000
Fair value
80,000,000
What is the value of the impairment loss?
A.
B.
C.
D. $0
$5,000,000
$15,000,000