Which of the following would not be considered a going concern?
A) Company A achieved its highest gross margin this year and expects it to remain at current levels for the next five years. However, management now deems it unlikely that forecasted operating income will cover required interest payments on new debt. The company sees no way to avoid insolvency.
B) Company B suffered a net loss this year resulting from a warehouse fire. The company still has 10 other warehouses where it keeps 95% of its inventory and it expects to achieve regular profits next year.
C) Company C has had 30 years of profits. Earlier this year, initial proceedings for an antitrust case against the company concluded at the European Commission and a decision is expected soon. An unfavorable decision could have a significant impact on the financial position of the Company.
D) Each of the above should be considered a going concern.
E) None of the above should be considered a going concern.
F) Company A & Company C
G) Company B & Company C
Correct Answer:
Verified
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