1. Determine the amount of impairment loss.2. What is the carrying value of Land after the recognition of the impairment loss? Hearts Company has various cash generating units. One cash generating unit has the following carryingamount of assets at year-end:Cash600,000Inventory1,400,000Land2,500,000Plant and equipmentAccumulated depreciationGoodwill9,000,0001,500,0001,000,000The management determined the value in use of the cash generating unit at P8,500,000. The fair valueless cost of disposal for the inventory was greater than the carrying amount.

Lets understand the basics. As per IAS 36 "Impairment loss", when carrying value of the asset cash…

Hearts Company has various cash generating units. One cash generating unit has the following carrying amount of assets at year-end: Cash 600,000 1,400,000 Inventory Land 2,500,000 Plant and equipment Accumulated depreciation Goodwill 9,000,000 1,500,000 1,000,000 The management determined the value in use of the cash generating unit at P8,500,000. The fair value less cost of disposal for the inventory was greater than the carrying amount.

Hearts Company has various cash generating units. One cash generating unit has the following carrying amount of assets at year-end: Cash 600,000 1,400,000 Inventory Land 2,500,000 Plant and equipment Accumulated depreciation Goodwill 9,000,000 1,500,000 1,000,000 The management determined the value in use of the cash generating unit at P8,500,000. The fair value less cost of disposal for the inventory was greater than the carrying amount.

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter7: Fixed Assets, Natural Resources, And Intangible Assets

Section: Chapter Questions

Problem 7.3.3MBA

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Hearts Company has various cash generating units. One cash generating unit has the following carrying amount of assets at year-end: Cash 600,000 1,400,000 2,500,000 Inventory Land Plant and equipment Accumulated depreciation 9,000,000 1,500,000 Goodwill 1,000,000 The management determined the value in use of the cash generating unit at P8,500,000. The fair value less cost of disposal for the inventory was greater than the carrying amount. 1. Determine the amount of impairment loss.
Autry Company uses the straight-line depreciation method, and reports the information below for its plant assets below: Cost: $850,000. Annual depreciation expense: $50,000. Accumulated depreciation expense: $200,000. Required: a. Compute the analytical measures of plant age for Autry Company b. What information is useful to determine an estimated point of plant asset replacement in a forecast of future cash flows? c. Will the analytical measures of plant age impact (be included) an analyst's forecast in this case?
Unison Company has various cash generating units. One cash generating unit has the following carrying amount of assets at year end: Cash 600,000 Inventory 1,400,000 Land 2,500,000 Plant and equipment 9,000,000 Accumulated depreciation 1,500,000 Goodwill 1,000,000 The management determined the value in use of the cash generating unit at 8,500,000. The fair value less cost of disposal for the inventory was greater than the carrying amount. Required: Prepare journal entry to recognize the impairment loss.
The company provided the data of PP&E in a cash-generating unit (CGU) as follows: Cost Accumulated Depreciation Equipment A $ 15,000 $ 8,000 Equipment B 30,000 19,000 Equipment C 45,000 23,000 The unit’s fair value less costs to sell was $25,000. The unit’s future cash flows was $32,000, and its present value was $28,000. The company adopted IFRS. Prepare journal entries to record impairment. If the recoverable amount of Equipment C is $19,000, prepare journal entries to record impairment. If the recoverable amount of Equipment C is $24,000, prepare journal entries to record impairment.
Fitzgerald Inc. uses IFRS and accounts for their property plant & equipment at amortized cost. Fitzgerald has a cash generating unit, Small Division, with a very unique business. Small Division has the following carrying amounts at June 30, 2021, its year end: $ 2,000 30,000 5,800 Land Building Equipment At June 30, 2021, the undiscounted future cash flows from operation and disposal of the division are estimated to be $38,000 (present value $33,50O). The land could now be sold for $3,000 (net of costs) but no separate valuations can be done on the building and equipment as there is little market for them for standalone use. Required: a. Perform impairment testing for the Small Division and calculate any impairment loss. b. Prepare the journal entry resulting from (a) c. Would your answer change if Fitzgerald reported under ASPE? How & Why?
PROBLEM:Fluffy Company's division one is a cash generating unit. The company has determined the recoverable value of division one to be P440,000. Moreover, the company has also determined the following for its building:Value in use P240,000Fair value less cost of disposal 260,000The carrying amounts of division one's assets are as follows:Inventory P160,000Building 320,000Equipment 160,000Goodwill 10,000 How much impairment loss was allocated to the inventory?* 1 punto 70,000 50,000 52,500 75,000 How much impairment loss was allocated to the building? * 1 punto 100,000 105,000 80,000 60,000 How much is the impairment loss of division one?* 1 punto 200,000 210,000 150,000 130,000 Assume the…
ABC Co. has a division that is considered to be a cash-generating unit for purposes of IAS 36, impairment of assets. The recoverable amount of this cash-generating unit is $130 000 at 31 December 2014. The carrying amount of the cash-generating unit is $181 000 at 31 December 2014, constituted by the following individual carrying amounts as at this date: Goodwill (purchased goodwill): 20 000 Equipment (measured under the cost model): 60 000 |Investment property (measured under the cost 81 000 model: Inventory 20 000 The recoverable amounts at 31 December 2014 for the goodwill and investment property could not be estimated on an individual basis, but the recoverable amount for equipment was estimated to be $40 000. In accordance with IAS 2 the net realizable value of the inventory was $15 000. Required: Calculate whether the cash-generating unit is impaired and compute the impairment loss if there's any.
INSTIGATE PROVOKE Co. determined that one of its cash-generating units is impaired. Information on the assets of the CGU is shown below: Assets Carrying amount Inventory 800,000 Investment property (at cost model) 1,600,000 Building 2,400,000 Goodwill 1,200,000 6,000,000 It was estimated that the value in use of the CGU is ₱3,600,000 and its fair value less costs of disposal is ₱2,400,000. How much is the impairment loss? a. 4,200,000 b. 3,200,000 c. 2,400,000 d. 2,000,000 2.How much is the carrying amount of the building after the impairment testing? a. 1,680,000 b. 1,120,000 c. 1,860,000 d. 2,040,000
ABC is testing a store branch for impairment. The assets of thebranch include a building with a carrying amount of P4,000,000,equipment of P3,000,000, inventory of P2,000,000 and goodwill ofP500,000. The fair value less cost to dispose of the inventory is P2,500,000.The expected cashflows from the branch are: Year Amount1 P 2,000,0002 1,700,0003 1,500,0004 1,500,0005 1,300,000 The effective interest rate is 9%. The present value of the cashflowsbeyond year 5 is estimated to be at P400,000. 10. Value in use of the store branch11. Total Impairment Loss12. Carrying value of the building after impairment13. Carrying value of the inventory after impairment14. Carrying value of the goodwill after impairment
14. Bronze Company operates a production line which is treated as a cash generating unit. At year end, the carrying amounts of the noncurrent assets of the cash generating unit are: Goodwill 1,100,000 Plant and machinery 2,200,000 At year end, the recoverable amount of the production line is estimated at 2,700,000. What are the revised carrying amounts of the goodwill and plant and machinery, respectively?
Georgia Peach has the following information regarding the sale of its equipment: Sales price $8,000 Cost $25,000 Accumulated depreciation $19,000 Which of the following statements is true regarding how the above information would be reported on Georgia's statement of cash flows? Group of answer choices Loss on sale of plant asset will be $17,000 Gain on sale of plant asset will be $2,000 Depreciation expense will be $19,000 Cash received from sale of plant asset will be $25,000
2. The Cash generating unit of the Logitech Company is the electronic division. The said company calculated the value in use of the division and amounted to P8,000,000. The carrying amounts of the asset are presented as follows: Building Equipment Inventory a. 8,000,000 For additional information, the company also determined that the fair value less cost to sell the building is P4,500,000. b. 1,000,000 6,000,000 What should be the amount reported as impairment loss? c. 3,500,000 3,000,000 d. 11,500,000 2,500,000