Jay Company plans to dispose of a group of net assets that form part of a disposal group. The net assets on December 31, 2020 are (at carrying value): Goodwill - P6,000,000; PPE - P18,000,000; Inventory - P10,000,000; Financial Assets (profit of P2,000,000 recognized in equity) - P7,000,000; Financial liabilities - P4,000,000; Total Net Assets - P37,000,000.
Jay Company plans to dispose of a group of net assets that form part of a disposal group. The net assets on December 31, 2020 are (at carrying value): Goodwill - P6,000,000; PPE - P18,000,000; Inventory - P10,000,000; Financial Assets (profit of P2,000,000 recognized in equity) - P7,000,000; Financial liabilities - P4,000,000; Total Net Assets - P37,000,000.
Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter12: Auditing Long-lived Assets And Merger And Acquisition Activity
Section: Chapter Questions
Problem 37RQSC
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Jay Company plans to dispose of a group of net assets that form part of a disposal group. The net assets on December 31, 2020 are (at carrying value):
Before the date of reclassification, the PPE has a fair value of P26,000,000; the inventory has a net realizable value of P9,000,000. The fair value less cost to sell of the disposal group is P25,000,000.
What amount of the impairment is allocated to the inventory & PPE?
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