Silver Company operates a production line which is treated as a cash generating unit for impairment review purposes. At year-end, the carrying amounts of the noncurrent assets are as follows: Goodwill 1,100,000 Machinery 2,200,000 The value in use of the production line is estimated at P2,700,000 at this time. 7. What is the revised carrying amount of goodwill after recognition of impairment? a. 1,100,000 b. 900,000 c. 800,000 d. 500,000 8. What is the revised carrying amount of machinery after recognition of impairment? a. 2,200,000 b. 1,800,000 c. 1,600,000 d. 1,900,000

Silver Company operates a production line which is treated as a cash generating unit for impairment review purposes. At year-end, the carrying amounts of the noncurrent assets are as follows: Goodwill 1,100,000 Machinery 2,200,000 The value in use of the production line is estimated at P2,700,000 at this time. 7. What is the revised carrying amount of goodwill after recognition of impairment? a. 1,100,000 b. 900,000 c. 800,000 d. 500,000 8. What is the revised carrying amount of machinery after recognition of impairment? a. 2,200,000 b. 1,800,000 c. 1,600,000 d. 1,900,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

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?
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.
Staton Corporation's balance sheet includes Equipment recorded at a cost of $110,000 and accumulated depreciation of 20,000. After performing its annual review for impairment, Staton determined the following: Asset value in use $69,000 Fair value less selling costs 67,000 Undiscounted cash flows... 89,000 a Assuming Staton uses the rational entity impairment model record the appropriate entries. b Assuming Staton uses the cost recovery model calculate the impairment if any.
ABC Ltd conducted an impairment test of one of its cash generating units (CGU) at 30 June 20X0. The test determined that the recoverable amount of the entire CGU was $80,000. The carrying amounts of the assets of the entity at 30 June 20X0 were: Equipment (net of depreciation) Receivables Goodwill $63,000 15,000 22,000 Required Prepare the journal entry to account for the impairment of goodwill at 30 June 20X0.
An asset, with a useful life of 10 years, wasacquired at the beginning of year 1 at a cost of $60 000. The asset is revalued at the beginning ofyear 4 in terms of the entitys revaluation policyto gross replacement cost of $ 80 000 at this date.Assume that depreciation calculated foraccounting purposes on the straight-line methodaccurately reflects economic obsolescence. What is the revaluation amount?
At the beginning of current year, Apple Company purchased a plating machine for P5,400,000. The entity received a government grant of P400,000 toward this capital cost. The machine is to be depreciated on a 20% reducing balance basis over 10 years. The estimated residual value is P200,000. Required: Prepare journal entries for the current year, assuming the grant is accounted for as: a. Deferred income b. Deduction from asset
Chloe Ltd purchased equipment on 1 April 20X2 for GHS 100,000. The equipment was depreciated using the reducing balance method at 25% per annum. Chloe Ltd prepares accounts to 31 March annually. Depreciation was charged up to and including 31 March 20X4. At that date, the recoverable amount of the equipment was GHS 42,000. According to IAS 36 Impairment of Assets, what was the impairment loss on this equipment calculated on 31 March 20X4?
Muskoko Inc. purchased a property for $1.800,000 in 2022. The carrying value of property was $1,500,000 when it was required to be tested for impairment at December 31, 2026. The fair value at December 31, 2026 is $1,250,000 and the present value of future cash flows from the production facility was calculated as S1.056.000 at December 31, 2026. What is the total impairment of the production facility. if any? Answers A-E A impairment gain of $ 5S0.000 B Impairment loss of $ 250.000 No impairment gain or loss D Impairmenit gain of $300.000 E mpairment loss of $ 444,000
Company A applies IFRS. The following information pertains to Company A's intangible assets: On December 31, Year 3, Company A determines the following data regarding one of its cash-generating units (CGUs): Total CGU Liabilities Other Assets Goodwill Carrying amount $90,000 ($160,000) $200,000 $50,000 Fair value minus cost to sell $80,000 Value in use $65,000 On January 1, Year 2, Company A purchased a restaurant franchise for $360,000. The franchise has an active market, and the company applies the revaluation model as its accounting policy regarding franchises and amortizes them using the straight-line method. The estimated useful life of the franchise is 20 years with no residual value. The company revalues the franchise at the end of each year. The fair values of the franchise at the end of Years 2 and 3 are $350,000 and $330,000 respectively. During Year 1, the company incurred the following costs in relation to an internally developed patent: research…
A company has a Cash Generating Unit (CGU) that had indicators of impairment for the year. The following information was provided on the assets: Carrying value at December 31, 2020 $1,700,000 Residual Value Fair Value $1,900,000 $6,120,000 Land Building Equipment $ 800,000 $ 300,000 6,200,000 1,600,000 1,520,000 Goodwill 4,000,000 13,500,000 The remaining useful life of the building as at December 31, 2020 is 20 years. The selling costs are 6% of the fair value for building and land. The selling cost for the equipment would be 8% of the fair value. The projected cash flows of the CGU is as follows: Year 1 $580,000 Year 2 580,000 Year 3 580,000 580,000 Year 4 Year 5 620,000 Assume that cash flows beyond year 5 will be the same amount. Required: Calculate the total impairment loss for the year ended December 31, 2020 and record the required journal entry. Assume a discount rate of 6%.
Determine whether there is any goodwill impairment and if so please calculate the goodwill impairment loss. On the date of acquisition, the following information is available: Fair Value of the reporting unit is $720,000 Fair Value of identifiable net assets $601,000 Goodwill $119,000 One year later at the first periodic review date the following information is available: Fair value of the reporting unit is $788,000 Carrying value of the reporting unit (includes goodwill) $889,000 Fair Value of identifiable net assets $766,000 $22,000
Company A applies IFRS. The following information pertains to Company A's intangible assets: On December 31, Year 3, Company A determines the following data regarding one of its cash-generating units (CGUs): Total CGU Liabilities Other Assets Goodwill Carrying amount $90,000 ($160,000) $200,000 $50,000 Fair value minus cost to sell $80,000 Value in use $65,000 On January 1, Year 2, Company A purchased a restaurant franchise for $360,000. The franchise has an active market, and the company applies the revaluation model as its accounting policy regarding franchises and amortizes them using the straight-line method. The estimated useful life of the franchise is 20 years with no residual value. The company revalues the franchise at the end of each year. The fair values of the franchise at the end of Years 2 and 3 are $350,000 and $330,000 respectively. During Year 1, the company incurred the following costs in relation to an internally developed patent: research…