Solution-Prepare schedules to determine the impairment loss

Prepare schedules to determine the impairment loss

Assignment Help Accounting Basics

Reference no: EM132971337

Question - On January 1, 2022, the Vallahara Company purchased machinery for P 650,000 which it installed in a rented factory. It is depreciating the machinery over 12 years by the straight-line method to a residual value of P 50,000. Late in 2026, because of increasing competition in the industry, the company believes that its asset may be impaired and will have a remaining useful life of five years, over which it estimates the asset will produce total cash inflows of P 1,000,000 and will incur total cash outflows of P 825,000. The cash flows are independent of the company's other activities and will occur evenly each year. The company is not able to determine the fair value based on a current selling price of the machinery. The company's discount rate is 10%.

Required -

1. Prepare schedules to determine whether, at the end of 2022, the machinery is impaired and, if so, the impairment loss to be recognized.

2. If the machinery is impaired, prepare the journal entry to record the impairment?

Reference no: EM132971337

Questions Cloud

Prepare the necessary journal entries to record current tax : Prepare the necessary journal entries to record the current tax liability, deferred tax assets and deferred tax liabilities as at 30 June 2021.

Calculate the costs that should be included in inventory : Calculate the costs that should be included in inventory in 2020. Tonto Furniture, a company that prepares its financial statements in accordance with IFRS

Which changing in inventory method is possible under ifrs : Executives are not sure about requirements, Explain briefly four disclosure requirements that should accompany financial statements in respect of inventory.

Compute number of shares to used in computing basic earning : The company had 500,000 shares of $4 par value common stock. Compute the number of shares to be used in computing basic earnings per share for 2015

Prepare schedules to determine the impairment loss : Prepare schedules to determine whether, at the end of 2022, the machinery is impaired and, if so, the impairment loss to be recognized

What was percentage of completion of beginning inventory : The equivalent units of production for the period was 5,831 units. What was the percentage of completion of the beginning inventory

Calculate the amount of the firm after-tax cash flow : Calculate the amount of the firm's after-tax cash flow from operations? Moby Dick Corporation has sales of $4,209,736; income tax of $498,689

What is the minimum price that ABC Ltd should quote : Initial set up costs for ABC Ltd to produce the first 1,000 units are £5,000. What is the minimum price that ABC Ltd should quote

Calculate the promised yield to maturity on the debt : Calculate the promised yield to maturity on the debt? A company we are examining has assets of total current market value of $460 (year 0).

User Account

All Pages

Prepare schedules to determine the impairment loss

Reference no: EM132971337

Reference no: EM132971337

Questions Cloud

Reviews

Write a Review

Accounting Basics Questions & Answers

How much control does fed have over this longer real rate

Coures:- fundamental accounting principles

Accounting problems

Theory of interest - term structure of interest rates

Write a report on internal controls

Prepare the bank reconciliation for company

Cost-benefit analysis

Theory of interest

Liquidity and profitability

What is the expected risk premium on the portfolio

Simple interest and compound interest

Capm and venture capital

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT