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1. El Dorado Foods Inc. owns a chain of specialty stores in the Pacific Northwest. Recently, four of the stores have experienced declining profits due

  1. 1. El Dorado Foods Inc. owns a chain of specialty stores in the Pacific Northwest. Recently, four of the stores have experienced declining profits due to market saturation in the area. As a result, management gathered data about possible impairment of the assets of the stores. The information gathered was as follows: Book value: $17.5 million Fair value: $14.9 million Undiscounted sum of future cash flows: $16.5 million Required: Determine the amount, if any, of the impairment loss that El Dorado must recognize on these assets.
    2. Meca Concrete purchased a mixer on January 1 for a cost of $45,000. Straight-line depreciation was used for years one and two based on an estimated eight-year life and $3,000 estimated residual value. In the third year of use, Meca revised its estimate and now believes the mixer will have a total service life of only six years, and that the residual value will be only $2,000. Required: Compute depreciation for the third year
    1. 3. First quarter credit sales totaled $700,000. The state sales tax rate is 4% and the local sales tax rate is 2%. The journal entry to record the sales shall include:

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