Reference no: EM133071854
QUESTION 1 - On January 01, 2020, Rabiya Company signed an agreement to operate as a franchise.
Initial franchise P4,800,000
Direct cost incidental to the franchise 150,000
Annual payment at the beginning of each year for 6 periods 800,000
Effective rate 15%
Franchise term. 6 years
Estimated useful life 8 years
The entity used 2 decimal places for the PV factor.
What is the franchise cost on December 31, 2021?
QUESTION 2 - Panama Company purchased a machine on March 15, 2018.
The related data is as follows:
Cost P3,000,000
Estimated useful life 10 years
Estimated residual value 150,000
The entity used the straight-line method.
On January 1, 2020, after a quality improvement review, the entity determined the following:
New estimated useful life 12 years
New estimated residual value life P 10,001,250
What is the depreciation of the machine in 2020?
QUESTION 3 - On January 01, 2020 Jimin company acquired the following intangible assets:
A trademark for P250,000
The trademark has a remaining legal life of 5 years. The trademark will be renewed in the future indefinitely without a problem.
A patent for P3,020,800
The patent has an economic life of 8 years.
On December 31, 2020, the intangible assets are tested for impairment.
The trademark is now expected to generate cash flows of just P28,000 per year.
The cash flows expected to be generated by the patent amount to P380,600 annually for each of the next 5 years.
The appropriate discount rate for all intangible assets is 14%
The entity used 2 decimal places for the PV factor.
How much is the total impairment loss for the period?
QUESTION 4 - Peru Company purchased a machine on January 1, 2016.
The related data is as follows:
Cost P3,800,000
Estimated useful life 5 years
Estimated residual value 250,000
The entity uses straight-line method.
On January 1, 2020, after a quality improvement review, the entity determined the following:
New estimated useful life 8 years
New estimated residual value P80,000
What is the carrying amount of the machine in 2020?