You have been provided with accounting research tools. Use them to answer the following multiple choice questions. After you make your choice, tell me what theory you are basing your answer on, or what part of the codification applies to the question

6 Hudson Corp. operates several factories that manufacture medical equipment. The factories have a historical cost of $200 million. Near the end of the companys fiscal year, a change in business climate related to a competitors innovative products indicated to Hudsons management that the $170 million carrying amount of the assets of one of Hudsons factories may not be recoverable. Management identified cash flows from this factory and estimated that the undiscounted future cash flows over the remaining useful life of the factory would be $150 million. The fair value of the factorys assets is reliably estimated to be $135 million. The change in business climate requires investigation of possible impairment. Which of the following amounts is the impairment loss?

A) $15 million. B) $20 million. C) $35 million. D) $65 million.

7. Harold Co. received $10,000 in cash and a productive asset with a fair value of $90,000 from Saxon Co. In exchange, Harold transferred a similar productive asset to Saxon. The asset transferred to Saxon had a fair value of $100,000 and a carrying amount of $80,000. If the transaction lacks commercial substance, at what amount should Harold record its newly acquired productive asset?

A) $90,000 B) $80,000 C) $72,000 D) $70,000

8. Which of the following statements describes the proper accounting for losses when nonmonetary assets are exchanged for other nonmonetary assets?

A) A loss is recognized immediately because assets received should not be valued at more than their cash equivalent price.

B) A loss is deferred so that the asset received in the exchange is properly valued.

C) A loss, if any, which is unrelated to the determination of the amount of the asset received should be recorded.

D) A loss can occur only when assets are sold or disposed of in a monetary transaction.

9. When an exchange of inventory items between an enterprise and another entity is undertaken to serve the needs of the enterprises customers, the enterprise should record the inventory items received based on the

A) Carrying amount of the inventory items relinquished.

B) Fair value of the inventory items relinquished.

C) Carrying amount of the inventory items received.

D) Fair value of the inventory items received.