On December 31 , 2010, Scotch Company decided and classified a group of its assets as held for sale . The assets form a disposal group and have the following carrying amount Accounts receivable P1,000, Inventory 4,000,000 Property, plant and equipment 16,000,000 Patent 4,000,000 Goodwill 5,000,000 On December 31 1, 2010 , the entity estimated that the fair value less cost to sell of the disposal group is P22,000,000 How much impairment loss is allocated to property, plant and equipment ?

On December 31 , 2010, Scotch Company decided and classified a group of its assets as held for sale . The assets form a disposal group and have the following carrying amount Accounts receivable P1,000, Inventory 4,000,000 Property, plant and equipment 16,000,000 Patent 4,000,000 Goodwill 5,000,000 On December 31 1, 2010 , the entity estimated that the fair value less cost to sell of the disposal group is P22,000,000 How much impairment loss is allocated to property, plant and equipment ?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 11PB: On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received...

See similar textbooks

Similar questions

N Incorporated plans to dispose a group of assets that form part a disposal group. These assets have the following data on December 31, 2021: Asset Carrying value Inventory 2 million Equipment 5 million Land 20 million Building 15 million Goodwill 3 million Total 45 million The carrying value of the inventory is equal to its net realizable value. On the date of reclassification, the fair value less cost to sell of the disposal group is 40 million. Impairment loss to be recognized on the date of reclassification is: a. 3,000,000 b. 2,000,000 c. 5,000,000 d. Answer not among the choices e. 0 Clear my choice
On December 31, 2022, ALR, Inc. classified one of its plant assets (land) as held for sale. The carrying value of the land as of that date was $2,000,000. The fair value less selling costs on that date was $1,800,000. As of December 31, 2023, the company had not sold the asset, so it was still classified as held for sale. fair value net of selling costs as of December 31, 2023, was $2,050,000. Based on this information, indicate how ALR should report the asset on the December 31, 2022, and December 31, 2023, balance sheets. Prepare any journal entries required. Begin by recording the journal entry to reclassify the land held for sale on December 31, 2022. (Record debits first, then credits. Exclude explanations from any journal entries. If no entry is required select "No Entry Required" on the first line of the journal entry table and leave all remaining cells in the table blank.) Аccount December 31. 2022 Now, record the journal entry to write down the asset on December 31, 2022.…
UNDOS COMPANY purchased equipment for P5,000,000 on January 1, 2013 with a useful life of ten years and no residual value. On January 1, 2015, the entity classified the asset as held for sale. The fair value of the equipment of January 1, 2015 is P3,300,000 and the cost of disposal is P100,000. On December 31, 2015, the fair value of the equipment is P3,800,000 and the cost of disposal is P200,000. On December 31, 2015, the entity believed that the criteria for classification as held for sale can no longer be met. Accordingly, the entity decided not to sell the asset but to continue to use it. What amount should be recognized in profit or loss as a result of the reclassification in 2015?
UNO COMPANY purchased equipment for P5,000,000 on January 1, 2013 with a useful life of ten years and no residual value. On January 1, 2015, the entity classified the asset as held for sale. The fair value of the equipment of January 1, 2015 is P3,300,000 and the cost of disposal is P100,000. On December 31, 2015, the fair value of the equipment is P3,800,000 and the cost of disposal is P200,000. On December 31, 2015, the entity believed that the criteria for classification as held for sale can no longer be met. Accordingly, the entity decided not to sell the asset but to continue to use it. What is the measurement of the equipment that ceases as held for sale on December 31, 2015?
2. Lynx Company is planning to dispose of a collection of assets. The entity designated these assets as a disposal group. The carrying amount of these assets immediately before classification as held for sale was P2,000,000. Upon being classified as held for sale, the assets were revalued to P1,800,000. The entity feels that it would cost P100,000 to sell the disposal group. What should be reported as the carrying amount of the disposal group in the entity's accounts after its classification as held for sale? a. 2,000,000 b. 1,800,000 O c. 1,700,000 O d. 1,900,000
The Whistler Company accounts for its property, plant and equipment using the cost model. On 30 October 20X7 Whistler classified an item of property, plant and equipment as held for sale in accordance with IFRS5, Non-current assets held for sale and discontinued operations. At that date the asset's carrying amount was CU20,000, its fair value was estimated at CU17,000 and the costs to sell at CU2,000. The value in use from the continued use of the asset if it was not sold was estimated at CU13,000. The asset has not yet been sold. In accordance with IFRS5, at what amount should the asset be stated in Whistler's statement of financial position at 31 December 20X7? CU13,000 CU15,000 CU17,000 CU20,000
On January 1, 2011, Barbidel Company purchased another entity at a cost of P9,000,000. The net assets of the acquiree had a carrying amount of P6,500,000 and fair value of P7,000,000. During the first quarter of 2011, Barbidel spent additional P800,000 of expenditures designed to maintain goodwill. Question: What amount should be reported as goodwill on December 31, 2011?
On January 1, 20Y3, The Simmons Group, Inc., purchased the assets of NWS Insurance Co. for $40,610,000, a price reflecting an $4,061,000 goodwill premium. On December 31, 20Y9, The Simmons Group determined that the goodwill from the NWS acquisition was impaired and had a value of only $1,522,875. Determine the book value of the goodwill on December 31, 20Y9, prior to making the impairment adjustment.
1. Coral Company accounts for noncurrent assets using the cost model. On July 31, 2011, Coral classified a noncurrent asset as held for sale. At that date, the asset's carrying amount was P1,450,000, its fair value was estimated at P2,150,000 and the cost to sell at P150,000. The asset was sold on January 31, 2012 for P2,120,000. At what amount should the asset be measured in Coral's statement of financial position on December 31, 2011? O a. 2,000,000 O b. 2,150,000 O c. 2,120,000 O d. 1,450,000
On December 1, 2018, Joy Corporation decided to dispose of an item of plant that is carried in its records at a cost of P450,000, with accumulated depreciation of P80,000. Depreciation on the plant since it was originally acquired has been charged at P5,000 per month. The company undertook all the necessary actions to be able to classify the asset as held for sale. It is estimated that it could sell the plant for its fair value, P350,000, incurring P10,000 selling costs in the process. On December 31, 2018, the plant had not been sold but, due to a shortage of this type of plant, there had been an increase in the fair value to P360,000 while expected costs to sell remain at P10,000. Case 1: Any gain on the subsequent increase in the fair value less cost to sell of a noncurrent asset classified as held for sale should be treated as follows: a. The gain should be recognized in full. b. The gain should not be recognized. c. The gain should…
On February 14, 2022, Frozen Company classified a non-current asset as held for sale. At that time, the asset's carrying amount was P64,000. It's fair value was estimated at P48,000 and the cost to sell at P3,800. On May 9, 2022, the asset was sold for P42,000 and paid transaction costs of P2,000. The company accounts for non-current assets using the cost model. 9. How much impairment loss is to be recorded by Frozen relating to the non-current assets held for sale? 10. At what amount should the non-current assets held for sale be recorded on Feb. 14, 2022? 11. How much gain(loss) is to be reported by Frozen on the disposal of the non-current assets held for sale?
Hindi Kho Kaya Corporation is using the cost model for noncurrent assets. On November 1, 2020, the entity classified a noncurrent asset as held for sale. At that date, the carrying amount was P3,000,000, the fair value was estimated at P2,200,000, and the cost of disposal at P300,000. On November 22, 2020, the asset was old for net proceeds of P1,600,000. What amount should be reported as loss on disposal for the year ended December 31, 2020? ₱300,000 ₱1,400,000 ₱500,000 ₱1,100,000 What is the impairment loss for 2020? ₱800,000 ₱1,400,000 ₱1,100,000 d. ₱1,700,000