Madison Company acquired a depreciable asset at the beginning of Year 1 at a cost of $12 million. At December 31, Year 1, Madison gathered the following information related to this asset: Carrying amount (net of accumulated depreciation) $10 million dollar
Fair value of the asset (net selling price) $7.5 million dollar
Sum of future cash flows from use of the asset $10 million dollar
Present value of future cash flows from use of the asset $8 million dollar
Remaining useful life of the asset 5 years

Required:
a. Determine the impact on Year 2 and Year 3 income from the depreciation and possible impairment of this equipment under (1) FRS and (2) U. S. GAAP.
b. Determine the difference in income, total assets, and total stockholders' equity for the period of Years 1—6 under the two different sets of accounting rules.

Which of the following statements is correct? a. two firms with identical sales and operating costs but with different amounts of debt and tax rates will have different operating incomes by definition. b. free cash flow (fcf) is, essentially, the cash flow that is available for interest and dividends after the company has made the investments in current and fixed assets that are necessary to sustain ongoing operations. c. retained earnings as reported on the balance sheet represent cash and, therefore, are available to distribute to stockholders as dividends or any other required cash payments to creditors and suppliers. d. if a firm is reporting its income in accordance with generally accepted accounting principles, then its net income as reported on the income statement should be equal to its free cash flow. e. after-tax operating income is calculated as ebit(1 - t) + depreciation.

The uno company was formed on january 2, year 1, to sell a single product. over a 2-year period, uno’s acquisition costs have increased steadily. physical quantities held in inventory were equal to 3 months’ sales at december 31, year 1, and zero at december 31, year 2. assuming the periodic inventory system, the inventory cost method which reports the highest amount for each of the following is inventory december 31, year 1/ cost of sales year 2 a: lifo fifo b: lifo lifo c: fifo fifo d: fifo lifo

How will firms solve the problem of an economic surplus a. decrease prices to the market equilibrium price b. decrease prices so they are below the market equilibrium price c.increase prices