ACCT251E6-22Sol - The fair value estimate of the trade name...

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EXERCISE 6-22 (15–20 minutes) (a) This exercise determines the present value of an ordinary annuity or expected cash flows as an fair value estimate. Cash flow Probability Expected Estimate X Assessment = Cash Flow $ 380,000 20% $ 76,000 630,000 50% 315,000 750,000 30% 225,000 X PV Factor, n = 8, I = 8% Present Value $ 616,000 X 5.74664 $ 3,539,930
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Unformatted text preview: The fair value estimate of the trade name exceeds the carrying value; thus, no impairment is recorded. (b) This fair value is based on unobservable inputsKillroys own data on the expected future cash flows associated with the trade name. This fair value estimate is considered Level 3....
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This document was uploaded on 12/03/2009.

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