On December 31, 2022, Joshua Company had an equipment with cost of P9,000,000 and accumulated depreciation of P3,000,000. Due to obsolescence and physical damage, the equipment was found to be impaired. On the same date, the entity determined that the equipment had a fair value less disposal cost of P4,500,000, discounted net cash inflows of P4,000,000 and undiscounted net cash inflows of P5,000,000. What amount should be reported as impairment loss for 2022? A. 1,500,000 B. 2,000,000 C. 1,000,000 D. Zero

On December 31, 2022, Joshua Company had an equipment with cost of P9,000,000 and accumulated depreciation of P3,000,000. Due to obsolescence and physical damage, the equipment was found to be impaired. On the same date, the entity determined that the equipment had a fair value less disposal cost of P4,500,000, discounted net cash inflows of P4,000,000 and undiscounted net cash inflows of P5,000,000. What amount should be reported as impairment loss for 2022? A. 1,500,000 B. 2,000,000 C. 1,000,000 D. Zero

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 11MCQ

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