RCG Company, purchased machinery to be used in production for P6,500,000 on April 1, 2017. The machine had a 5-year life, P500,000 residual value, and was depreciated using the double declining balance method. On January 1, 2020 a test for impairment indicated that the undiscounted cash flows from the machine are less than its carrying value. The machine's value in use on January 1, 2020 is P1,100,000. 1. What is the loss on impairment?
RCG Company, purchased machinery to be used in production for P6,500,000 on April 1, 2017. The machine had a 5-year life, P500,000 residual value, and was depreciated using the double declining balance method. On January 1, 2020 a test for impairment indicated that the undiscounted cash flows from the machine are less than its carrying value. The machine's value in use on January 1, 2020 is P1,100,000. 1. What is the loss on impairment?
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 8MC: On July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was...
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RCG Company, purchased machinery to be used in production for
P6,500,000 on April 1, 2017. The machine had a 5-year life, P500,000 residual value, and was
impairment indicated that the undiscounted cash flows from the machine are less than its carrying value. The machine's value in use on January 1, 2020 is P1,100,000.
1. What is the loss on impairment?
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