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How much is the impairment loss on the year-end

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Reference no: EM133207405

1.) The related data of Milka Company at year- end:

Machinery      P1,925,000

Accumulated depreciation     P525,000

Due to the COVID-19 pandemic, the machinery is found to be impaired.

Related data:

Fair value less cost of disposal       P1,050,000

The machinery is expected to generate P275,000 cash per year for the remaining life of 5 years. The discount rate is 8%

The entity used 2 decimal places for the PV factor.

How much is the impairment loss at year-end?

2.) On January 1, 2020, Madonna Company acquired a trademark costing P3,250,000.

The trademark has a remaining legal life of 5 years but would be routinely renewed.

The trademark is expected to generate cash flows amounting to  P260,000 per year. The discount rate is 10%.

How much is the impairment loss on the year-end?

Reference no: EM133207405

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