Topic: Impairment of Asset Uranus Company has various cash generating units. On December 31,2014, one cash generating unit has the following carrying amount of assets: 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 Carrying amount 13,000,000 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. Required: Prepare journal entry to recognize the impairment loss.

Topic: Impairment of Asset Uranus Company has various cash generating units. On December 31,2014, one cash generating unit has the following carrying amount of assets: 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 Carrying amount 13,000,000 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. Required: Prepare journal entry to recognize the impairment loss.

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter8: Investing Activities

Section: Chapter Questions

Problem 1.3AIC: Estimate the average total estimated useful life of depreciable property, plant, and equipment....

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Question

Topic: Impairment of Asset

Uranus Company has various cash generating units. On December 31,2014, one cash

generating unit has the following carrying amount of assets:

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

Carrying amount 13,000,000

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.

Required:

Prepare journal entry to recognize the impairment loss.

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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