Questions 9 through 12 are based on the following information: On January 1, 2021, Bida-bida Corp. purchased a building for P 20,000,000. The building has a useful life of P 20 years and no residual value. On December 31, 2025, the entity tested the asset for impairment. The fair value on such date is P 12,000,000. On December 31, 2027, Bida-bida Company decided to use the revaluation model. The fair value of the assets on such date has risen to P 18,000,000. 9. What amount should be recognized as impairment loss on 2025? 10. What is the carrying amount of the impaired asset on December 31, 2027? 11. What amount should be recognized as gain in reversal of impairment for 2027? 12 What amount should be recognized as revaluation surplus in 2027?

Questions 9 through 12 are based on the following information: On January 1, 2021, Bida-bida Corp. purchased a building for P 20,000,000. The building has a useful life of P 20 years and no residual value. On December 31, 2025, the entity tested the asset for impairment. The fair value on such date is P 12,000,000. On December 31, 2027, Bida-bida Company decided to use the revaluation model. The fair value of the assets on such date has risen to P 18,000,000. 9. What amount should be recognized as impairment loss on 2025? 10. What is the carrying amount of the impaired asset on December 31, 2027? 11. What amount should be recognized as gain in reversal of impairment for 2027? 12 What amount should be recognized as revaluation surplus in 2027?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 5E: Comprehensive: Acquisition, Subsequent Expenditures, and Depreciation On January 2, 2019, Lapar...

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On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an estimated life of 20 years and an estimated residual value of 20,000. The company has been depreciating the building using straight-line depreciation. At the beginning of 2020, the following independent situations occur: a. The company estimates that the building has a remaining life of 10 years (for a total of 16 years). b. The company changes to the sum-of-the-years-digits method. c. The company discovers that it had ignored the estimated residual value in the computation of the annual depreciation each year. Required: For each of the independent situations, prepare all journal entries related to the building for 2020. Ignore income taxes.
The following intangible assets were purchased by Goldstein Corporation: A. A patent with a remaining legal life of twelve years is bought, and Goldstein expects to be able to use it for seven years. B. A copyright with a remaining life of thirty years is purchased, and Goldstein expects to be able to use it for ten years. For each of these situations, determine the useful life over which Goldstein will amortize the intangible assets.
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