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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 tangible operational assets. 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

Determine the amount, if any, of the impairment loss that El Dorado must recognize on these assets.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M976621

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