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What is the amount of the impairment loss

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Question - Chadwick Enterprises, Inc., operates several restaurants throughout the Midwest. Three of its restaurants located in the center of a large urban area have experienced declining profits due to declining population. The company's management has decided to test the restaurants for possible impairment. The relevant information is presented below.

Book value $6.5 million

Estimated undiscounted sum of future cash flows 6.0 million

Fair value of assets 8.5 million

Fair value of liabilities 3.0 million

Required - What is the amount of the impairment loss, if any?

a. $500,000

b. $1,000,000

c. $2,000,000

d. No impairment is indicated

Reference no: EM133185392

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