Determine the carrying amount of factory machinery at dec

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Reference no: EM132792998

Emerald Corporation is a leading semi-conductor manufacturing company in the country. On December 31, 2019, the company made an analysis of economic indicators that suggests that assets of one of its cash generating units were impaired.

The carrying amounts of these assets as of December 31, 2019 were:

Cash 200,000
Accounts receivable 400,000
Allowance for doubtful accounts 50,000
Inventory 800,000
Building 4,200,000
Accum. Depr. Building (P600,000/year)1,800,000
Factory Machinery 2,200,000
Accum. Depr. Machinery (P450,000/year)400,000

The company determined that the value in use of the unit is P5,350,000. The receivables were considered to be collectible except for those that are doubtful.
During 2020, the company increased the depreciation charge on the buildings to P650,000 per year and to P500,000 per year for factory machinery. The inventory on hand at December 2019 was sold by the end of 2020. At December 31, 2020, the company, due to a foreseen increase in demand for the semi-conductors the company is manufacturing, they assessed that the recoverable amount of the cash generating unit is P200,000 greater than the carrying amount of the unit.

Problem 1: Determine the following:

1. Carrying amount of the buildings at December 31, 2019 after allocating impairment loss.
2. Carrying amount of the factory machinery at December 31, 2019 after allocating impairment loss.
3. Carrying amount of buildings at December 31, 2017 after the reversal of impairment loss.
4. Carrying amount of factory machinery at December 31, 2017 after the reversal of impairment loss

Reference no: EM132792998

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