What is the carrying value of the office equipment

Reference no: EM132841841

Problem - Soondi Corp. acquired the net assets of Mondi Inc. in a business combination on January 1, 2016 for a total acquisition price of P6M. Mondi Inc.'s net assets comprise of two cash generating unit whose identifiable assets had fair market value of cash generating unit 1, P3,000,000 and cash generating unit 2, P2,000,000. At the end of 2016, the following information were identified regarding the two cash generating units:

	Cash Generating Unit 1	Cash Generating Unit 2
Cash	50,000	65,000
Receivables	75,000	95,000
Inventories	120,000	150,000
Factory Equipment	500,000	750,000
Office Equipment	900,000	1,200,000
Building	1,200,000	1,500,000
Goodwill	600,000	400,000
Net Cash flows from continued operations	520,922	446,493
Expected remaining life	9	11
Fair value less cost to sell of the CGU *excluding cash and receivables	2,500,000	3,200,000
Net realizable value of Inventories	150,000	140,000
Prevailing market rate of interest	10%	10%

Required -

1. What is the overall impairment loss on goodwill for cash generating units' 1 and 2?

2. What is the carrying value of building of cash generating unit 2 after impairment loss recognition?

3. Assuming that, the office building has a fair market value of P1,600,000, what is the carrying value of the office equipment after the impairment loss recognition?

Reference no: EM132841841

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