What amount of impairment loss should MM Co recognize

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Q1) MM Co. operates an oil platform in the sea. The firm has received an offer to buy the oil platform for P32,000,000 and the cost to sell would be P6,000,000. The value-in-use of the oil platform is approximately P28,000,000. The carrying value of the oil platform is P40,000,000. What amount of impairment loss should MM Co. recognize in relation to the oil platform?

a) P0

b) P8,000,000

c) P10,000,000

d) P12,000,000

e) answer not given

Q2) On January 1, 2016, Guava Co. bought a patent for P270,000. Amortization is being made over its remaining life of 10 years expiring on January 1, 2026. During 2020, Guava Co. estimated that the economic life of the patent will be 7 years from the date of acquisition. What amount should Guava Co. report as patent net of accumulated amortization in its December 31, 2020 balance sheet?

a) P1,600,000

b) P108,000

c) P54,000

d) P23,143

e) answer not given

Reference no: EM132941267

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