ACC_300_HW_1B - Venk Seelam ACC 300 Assignment#1B 1 For the...

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Venk Seelam ACC 300 08/25/2011 Assignment #1B 1) For the quarter ending September 30, 2011 Redstone should recognize the financial statement and disclose the impairment loss and planned disposition of the water treatment equipment. At the date of the transaction on November 30, 2011 Redstone should disclose the impairment loss from the sale of the long lived asset (water treatment equipment) not previously recognized as the book value of the asset is higher than the future cash flows because of the equipment’s degradation and depreciation over the years. There is both cash and non-cash portions in the transaction, and the company should only report the cash portion in their statement of cash flows. The company should disclose in the financial statements the amount of gross operating revenue recognized as a result of nonmonetary transactions. 2) The economic cost of installing the new equipment does not qualify as real estate. Redstone should determine that the new asset does not qualify as integral equipment because the water treatment is a physical asset that is replaceable. With the purchase and installation of the new equipment, the costs overall are not significant to determine the
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This note was uploaded on 11/02/2011 for the course ACCOUNTING 300 taught by Professor Rodhurd during the Fall '11 term at Golden Gate.

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ACC_300_HW_1B - Venk Seelam ACC 300 Assignment#1B 1 For the...

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