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On January 1, 2017, the Ilocos Norte Corporation purchased the business of its competitor in a business combination. The total purchase price was at P15M. The only identifiable asset of the said competitor included a factory building with a fair value of 3,600,000 and 2 machineries with a fair market value of P6M (Mach A) and P4M (Mach B). The acquired business is considered a separate business segment distinct from all other operations of Ilocos Norte Corporation. The factory building was estimated to have a 30-year remaining useful life while machineries were estimated to have a fifteen and twenty-year useful lives for machinery A and B, respectively. Assets are to be
Assuming that the Machinery A had a fair market value less cost to sell at P3M, what is the carrying value Factory Building after the impairment loss has been recognized?
Group of answer choices
1,500,000
3,000,000
1,950,000
1,750,000
Assuming that the Machinery A had a fair market value less cost to sell at P5M, what is the carrying value Machinery B after the impairment loss has been recognized?
Group of answer choices
1,500,000
1,250,000
3,000,000
1,750,000
How much is the loss from impairment to be recognized?
Group of answer choices
4,900,000
3,500,000
5,067,266
5,467,266
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- The following are several figures reported for Allister and Barone as of December 31, 2021: Allister Inventory Sales Investment income Cost of goods sold Operating expenses $ 620,000 $ Barone 420,000 1,240,000 1,040,000 not given 620,000 290,000 520,000 360,000 Allister acquired 90 percent of Barone in January 2020. In allocating the newly acquired subsidiary's fair value at the acquisition date, Allister noted that Barone had developed a customer list worth $80,000 that was unrecorded on its accounting records and had a four-year remaining life. Any remaining excess fair value over Barone's book value was attributed to goodwill. During 2021, Barone sells inventory costing $142,000 to Allister for $204,000. Of this amount, 10 percent remains unsold in Allister's warehouse at year- end. Determine balances for the following items that would appear on Allister's consolidated financial statements for 2021: Inventory Sales Cost of goods sold Operating expenses Net income attributable to…arrow_forwardJacky Inc. purchased Manzanita Marine on June 1, 2015 for $25,000,000 and recorded goodwill of $3,100,000 in connection with the purchase. At December 31, 2018, the Manzanita Marine Division had a fair value of $25,400,000. The net assets of Manzanita (including goodwill) had a fair value of $24,900,000 at that time. What amount of loss on impairment of goodwill should Jacky record in 2018?arrow_forwardIn 2010, if Cinnamon is deemed to have control over Cambridge, it will most likelyaccount for its investment in Cambridge using:A . the equity method.B . the acquisition method.C . proportionate consolidationarrow_forward
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