a)
To discuss: Whether the office building or brand name is more liquidated for near to its market value in the happening of financial distress.
Introduction:
The financial distress could be a condition where a corporation cannot meet or has issue paying off its financial obligations to its creditors.
An office building is called as an office block or business centre to carry on the legal business.
The brand name identifies not only the products but also its manufactures.
b)
To discuss: The raw material or product inventory is more liquidated for near to its market value in the happening of financial distress.
Introduction:
The financial distress could be a condition where a corporation cannot meet or has an issue paying off its financial obligations to its creditors.
The product inventory is an inventory where business stores goods with intension to sale them when prices rise.
The raw materials are materials used in the manufacturing of goods.
c)
To discuss: The patent rights or engineering is more liquidated for near to its market value in the happening of financial distress.
Introduction:
The financial distress could be a condition where a corporation cannot meet or has issue paying off its financial obligations to its creditors.
A patent is a right granted by a government to an inventor to sell or manufacture an invention for a specified number of years.
Engineering is the application of economic, practical knowledge, mathematics, scientific to find different types of products.
Want to see the full answer?
Check out a sample textbook solutionChapter 16 Solutions
EBK CORPORATE FINANCE
- What is depreciation, how is it calculated and how does it relate to the matching principle of accounting? Are there any estimates in depreciation and what are they? Why is it better to use these estimates than to not depreciate at all? What would be the alternatives to depreciation and what kinds of problems do they present? Please think about where we report equipment and similar items on the financial statements.arrow_forwardMCQ: Choose only the correct answer Which of the following statements is false? (a) Financial Instruments are intangible assets (b) Goodwill is not amortizable (c) Goodwill can be identified only in business combination situation (d) Straightline method is generally used to calculate amortazation Which of the following will not be considered while calculating the depletion base? (a) Acquisition costs (b) Tangible development costs (c) Restoration Costs (d) Intangible development costs Which of the following will not be included into the the original cost of a land? (a) Legal fees (b) Brokers' commision (c) Property taxes (D) Accrued property taxes of previous owner The journal entry to record the transportation cost paid by the purchaser under periodic inventory system is- (a) Inventory Dr. and Cash Cr. (b) Transportation-in Dr. & Cash Cr. (c) Delivery Expense Dr. & Cash Cr. (d) Transportation-Out Dr. & Cash Cr. In case of change in estimate of useful life for a tangible…arrow_forwardWhat element must be present when determining if an asset is a depreciating asset? a. An asset that holds its value for a period of time or increases in value for a period. b. An asset that has a limited effective life. c. A fixture that completely loses its value. d. An asset that cannot reasonably be expected to decline in value over time.arrow_forward
- Explain the reasons for the impairment and the justification for treating the write-down as a permanent decline in value of the asset(s). A difference between the book value of plant assets and the fair value generally exists.Explain the role technology and obsolescence have in the impairment of assets.arrow_forwardwhat is Intangible Asset ? what is Wasting Assets ? what is Asset Cost ? what is Residual Value? and what are : e) Depreciation Base f) Book Value g) Historical Cost ? and also what is Basket Purchase of Non- Current Operating Assets.?arrow_forwardTRUE OR FALSE? Once decided by management as an asset held for sale, management can never change its decision to revert back an asset as part of property, plant and equipment.arrow_forward
- 3. Which of the following is not an inherent risk related to long-lived asset. accounts? a. Failing to record asset disposals. b. `Capitalizing repairs and maintenance expense. c. Changing depreciation estimates to manage earnings. d. All of the above.arrow_forwardShould the engineers be able to assess the reality of depreciating fixed assets?arrow_forwardIt results not from a deterioration in the asset's ability to serve its intended purpose, but from a change in the demand for the services it can render. O physical depreciation functional depreciation O technological depreciation monetary depreciationarrow_forward
- 2) Which of the following does not relate to expenses which require capitalisation? A) Expenses that relate to required major inspection of the asset B) Expenses that enhance the economic benefits provided by the asset C) Expenses that relate to the replacement of a major component of the asset D) Expenses that relate to day-to-day maintenancearrow_forwardQ1 Which of the following statement (s) is (are) true? (i) When no future economic benefits are no longer expected to flow from an intangible asset, such asset should be derecognized the financial statements of an organization. (ii) When an intangible asset is derecognized, the carrying amount should be written off as a loss in the profit or loss statement at the date of retirement of the asset. (iii) When an intangible asset is sold, the difference between the carrying amount and consideration received is recognized in the profit or loss statement at the date of the sale. (iv) Consideration to be received in the event of sale of an intangible asset should only be cash Select one: a. (ii) and (iv) only b. (i) and (ii) only c. (i) and (iv) only d. (i), (ii) and (iii) onlyarrow_forwardWhich of the following groups would be classified as intangible assets for financial accounting andreporting purposes? a. long-term notes receivable, copyrights, goodwill, and trademarksb. patents, computer software costs, franchises, and trademarksc. computer software costs, research and development costs for internally developed patents,patents, and goodwilld. organization costs, goodwill, costs of employee training programs, and trademarksarrow_forward
- Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning