2.99 See Answer

Question: Using the same information from P12-2,

Using the same information from P12-2, assume that Cupcakes-R-Us determines that the likelihood of the expected future cash flows under Estimate 1 is 70% and 30% under Estimate 2 Required a. Compute the carrying value of Cupcakes-R-Us’s equipment. b. Compute the expected cash flows given the likelihood of Estimate 1 and Estimate 2. What is the present value of the expected cash flows? c. Conduct the impairment tests for Cupcakes-R-Us using the results from part (b). If required, prepare the journal entry to record any impairment loss Data from P12-2:
Using the same information from P12-2, assume that Cupcakes-R-Us determines that the likelihood of the expected future cash flows under Estimate 1 is 70% and 30% under Estimate 2

Required 
a. Compute the carrying value of Cupcakes-R-Us’s equipment. 
b. Compute the expected cash flows given the likelihood of Estimate 1 and Estimate 2. What is the present value of the expected cash flows? 
c. Conduct the impairment tests for Cupcakes-R-Us using the results from part (b). If required, prepare the journal entry to record any impairment loss

Data from P12-2:

2.99

See Answer