27.Lyons. owns equipment for which it paid $90 million. At the end of 2021, it had accumulated depreciation on the equipment of $27 million. Due to adverse economic conditions, Fryer's management determined that it should assess whether an impairment loss should be recognized for the equipment. The estimated undiscounted future cash flows to be provided by the equipment total $60 million, and the equipment's fair value at that point is $40 million. Under these circumstances, Fryer:
A. Would record no impairment loss on the equipment.
B. Would record a $3 million impairment loss on the equipment.
C. Would record a $23 million impairment loss on the equipment.
D. None of these answer choices are correct.
28.. Ronald Enterprises purchased equipment for $72,000 on January 1, 2021. The equipment is expected to have a five-year life and a residual value of $6,000.
Using the straight-line method, depreciation for 2022 and the equipment's book value at December 31, 2022, would be:
A. $14,400 and $43,200 respectively.
B. $28,800 and $37,200 respectively.
C. $13,200 and $45,600 respectively.
D. $13,200 and $39,600 respectively.
29.. On April 31, 2021, Franklins borrowed $10 million cash from Colonial Bank and issued a 5-month, noninterest-bearing note, priced to yield an effective interest rate of 10%. The stated discount rate on this loan is:
A. More than the effective interest rate.
B. Less than the effective interest rate.
C. Equal to the effective interest rate.
D. Unrelated to the effective interest rate.
30. What is the effective interest rate (rounded) on a 3-month, noninterest-bearing note with a stated rate of 12% and a maturity value of $200,000? (Do not round intermediate calculations. Round final answer to 1 decimal place.)
A. 12.4%.
B. 13.6%.
C. 11.5%.
D. 3.1%
31. On September 1, 2021, Boston Shores issued a $100,000, 8-month, noninterest-bearing note. The loan was made by Second Commercial Bank where the stated discount rate is 9%. Hiker's effective interest rate on this loan (rounded) is: (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
A. 9.6%.
B. 9.5%.
C. 9.0%.
D. 9.7%.
