On January 1, 2019, Israel Corp. has equipment having a useful life of 10 years with the following cost and accumulated depreciation. The company uses straight-line method in depreciating its equipment. Equipment P 5,000,000 Accumulated depreciation 1,500,000 Due to obsolescence and physical damage, the equipment is found to be impaired on December 31, 2019. Israel Corp. has determined the following: Undiscounted cash flows of the equipment P 3,100,000 Fair value of the equipment less cost to sell 2,250,000 Discounted cash flows of the equipment 2,500,000 Israel Corp. recognizes an impairment loss on December 31, 2019 at A. P1,000,000 B. P750,000 C. P500,000 D. P-0-
On January 1, 2019, Israel Corp. has equipment having a useful life of 10 years with the following cost and accumulated depreciation. The company uses straight-line method in depreciating its equipment. Equipment P 5,000,000 Accumulated depreciation 1,500,000 Due to obsolescence and physical damage, the equipment is found to be impaired on December 31, 2019. Israel Corp. has determined the following: Undiscounted cash flows of the equipment P 3,100,000 Fair value of the equipment less cost to sell 2,250,000 Discounted cash flows of the equipment 2,500,000 Israel Corp. recognizes an impairment loss on December 31, 2019 at A. P1,000,000 B. P750,000 C. P500,000 D. P-0-
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 14P: Hunter Company purchased a light truck on January 2, 2019 for 18,000. The truck, which will be used...
Related questions
Question
On January 1, 2019, Israel Corp. has equipment having a useful life of 10 years with the following
cost and
- Equipment P 5,000,000
- Accumulated depreciation 1,500,000
Due to obsolescence and physical damage, the equipment is found to be impaired on December 31, 2019.
Israel Corp. has determined the following:
- Undiscounted
cash flows of the equipment P 3,100,000 - Fair value of the equipment less cost to sell 2,250,000
- Discounted cash flows of the equipment 2,500,000
Israel Corp. recognizes an impairment loss on December 31, 2019 at
A. P1,000,000
B. P750,000
C. P500,000
D. P-0-
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning