ABC Corporation is testing the impairment of a cash generating unit that includes the accounts as shown in the image. The inventories can be sold for a net amount of P400,000 while the receivables can be realized at carrying amount. The expected cash flows from the unit is P1,200,000 for the first five years and P600,000 for the last five years. ABC deems it appropriate to have a discount rate of 8%. What is the net carrying value of the equipment after impairment? Inventory 300,000 Accounts Receivable, net 500,000 Equipment, net 7,000,000 Patent, net 1,700,000 Account Payable 800,000 Goodwill 100,000
ABC Corporation is testing the impairment of a cash generating unit that includes the accounts as shown in the image. The inventories can be sold for a net amount of P400,000 while the receivables can be realized at carrying amount. The expected cash flows from the unit is P1,200,000 for the first five years and P600,000 for the last five years. ABC deems it appropriate to have a discount rate of 8%. What is the net carrying value of the equipment after impairment? Inventory 300,000 Accounts Receivable, net 500,000 Equipment, net 7,000,000 Patent, net 1,700,000 Account Payable 800,000 Goodwill 100,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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ABC Corporation is testing the impairment of a cash generating unit that includes the accounts as shown in the image.
The inventories can be sold for a net amount of P400,000 while the receivables can be realized at carrying amount.
The expectedcash flows from the unit is P1,200,000 for the first five years and P600,000 for the last five years. ABC deems it appropriate to have a discount rate of 8%.
The inventories can be sold for a net amount of P400,000 while the receivables can be realized at carrying amount.
The expected
What is the net carrying value of the equipment after impairment?
| Inventory | 300,000 |
| 500,000 | |
| Equipment, net | 7,000,000 |
| Patent, net | 1,700,000 |
| Account Payable | 800,000 |
| 100,000 |
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