Capping Division is a cash generating unit. The entity calculated that the value in use of the division to be P2.750,000. The entity has also determined that the Fair Value Less cost to dispose of the Plant is P1.625,000. The carrying amount of the assets are as follows: Plant - P2.000,000; Machineries - P1,000,000: Inventories - P1.500,000; Goodwill - P500,000
Capping Division is a cash generating unit. The entity calculated that the value in use of the division to be P2.750,000. The entity has also determined that the Fair Value Less cost to dispose of the Plant is P1.625,000. The carrying amount of the assets are as follows: Plant - P2.000,000; Machineries - P1,000,000: Inventories - P1.500,000; Goodwill - P500,000
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter8: Investing Activities
Section: Chapter Questions
Problem 1.3AIC: Estimate the average total estimated useful life of depreciable property, plant, and equipment....
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Q1. Anna Essentials has determined that the Capping Division is a cash
generating unit. The entity calculated that the value in use of the division
to be P2.750,000. The entity has also determined that the Fair Value Less
cost to dispose of the Plant is P1.625,000. The carrying amount of the
assets are as follows: Plant - P2.000,000; Machineries - P1,000,000:
Inventories - P1.500,000; Goodwill - P500,000. How much is the carrying
amount of Machineries after the impairment?
Q2. Anna Essentials has determined that the Capping Division is a cash generating unit. The entity calculated that the value in use of the division to be P2,750,000. The entity has also determined that the Fair Value Less cost to dispose of the Plant is P1,625,000. The carrying amount of the assets are as follows: Plant – P2,000,000; Machineries – P1,000,000; Inventories – P1,500,000; Goodwill – P500,000. How much is the carrying amount of Inventories after the impairment?
Q3. On January 1, 2019, Army Company purchased a machinery with a cost of 3,000,000, useful life of 8 years and no residual value. The entity used straight line depreciation . At year end, the entity determined that impairment indicators are present. There is no change in the useful life or residual value.
The following information is available for impairment testing at each year end:
December 31,2020
FV less cost of disposal P2,137,500
Value in Use 2,025,000
December 31, 2021
FV less cost of disposal P2,050,000
Value in Use 2,100,000
How much is the depreciation expense on 2022?
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