Current Attempt in Progress At the end of 2025, Windsor Company is conducting an impairment test and needs to develop a fair value estimate for machinery used in its manufacturing operations. Given the nature of Windsor's production process, the equipment is for special use. (No secondhand market values are available.) The equipment will be obsolete in 2 years, and Windsor's accountants have developed the following cash flow information for the equipment. Year 2026 2027 2027 Net Cash Flow Estimate $6,540 8,690 $(470) 2,060 3,600 Scrap value $500 910 Probability Assessment 40% 60% 20% 60% 20% 50% 50% Click here to view factor tables. Using expected cash flow and present value techniques, determine the fair value of the machinery at the end of 2025. Use a 4% discount rate. Assume all cash flows occur at the end of the year. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 458,581.) Fair value of the machinery at the end of 2025 S

Current Attempt in Progress At the end of 2025, Windsor Company is conducting an impairment test and needs to develop a fair value estimate for machinery used in its manufacturing operations. Given the nature of Windsor's production process, the equipment is for special use. (No secondhand market values are available.) The equipment will be obsolete in 2 years, and Windsor's accountants have developed the following cash flow information for the equipment. Year 2026 2027 2027 Net Cash Flow Estimate $6,540 8,690 $(470) 2,060 3,600 Scrap value $500 910 Probability Assessment 40% 60% 20% 60% 20% 50% 50% Click here to view factor tables. Using expected cash flow and present value techniques, determine the fair value of the machinery at the end of 2025. Use a 4% discount rate. Assume all cash flows occur at the end of the year. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 458,581.) Fair value of the machinery at the end of 2025 S

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Protection Company develops a patent on a new fingerprint security technology. On January 1, 2018, this patent is registered for a cost of $30,000,000 for a period of 10 years. The company does not expect this technology to be obsolete over at least the next 15 years and intends to use it over this period. At the end of 2020, the fair value of the patent is $15,000,000. The discounted value of future cash flows (value-in-use) is $16,000,000. The Company adopts the cost model. 1. What will the cost of patent be? 2. What will the useful life be? Justify your answer. 3. Prepare the entries for 2018, 2019 and 2020. Please show the workings. Dont provide handwritten or image based answers thank you
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