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Required information [The following information applies to the questions displayed below.] El Dorado Foods Inc. owns a chain of specialty stores in the Pacific
Required information [The following information applies to the questions displayed below.] 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: $17.30 million Fair value (Present value of future cash flows): $14.86 million Undiscounted sum of future cash flows: $16.30 million Required: Assume that the undiscounted sum of future cash flows is $18.00 million, instead of $16.30 million. Determine the amount, if any, of the impairment loss that El Dorado must recognize on these assets. Impairment loss millions
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