Reference no: EM132939817
Questions -
Q1. An equipment of KAY Corporation was tested for impairment on December 31, 2019. The carrying value of the said equipment on that date is 4,800,000. The equipment can be sold for 4,500,000, and an estimate of 200,000 will be incurred for disposal. The cash flows that will be generated by the equipment for 2020, 2021, and 2022, are 2,000,000; 1,800,000; and 1,450,000, respectively. The appropriate discount rate is 11%. How much is the recoverable amount?
Q2. An equipment of KAY Corporation was tested for impairment on December 31, 2019. The carrying value of the said equipment on that date is 4,800,000. The equipment can be sold for 4,500,000, and an estimate of 200,000 will be incurred for disposal. The cash flows that will be generated by the equipment for 2020, 2021, and 2022, are 2,000,000; 1,800,000; and 1,450,000, respectively. The appropriate discount rate is 11%. How much is the impairment loss?
Q3. EL Corporation, an entity under the mining industry, incurred a total of 20,000,000 on March 31, 2018 for the acquisition, exploration, and development of its wasting asset. The entity estimates that a total of 50,000 units of recoverable deposits can be extracted within 5 years. On the same date, the entity purchased a mining equipment which can only be used for the extraction of the recoverable deposits. The cost of the equipment is 15,000,000, the estimated useful life is 8 years, and the residual value is P3,000,000.The entity was able to extract 5,500 units in 2018, and 11,800 units in 2019. How much is the depletion in 2018?
Q4. EL Corporation, an entity under the mining industry, incurred a total of 20,000,000 on March 31, 2018 for the acquisition, exploration, and development of its wasting asset. The entity estimates that a total of 50,000 units of recoverable deposits can be extracted within 5 years. On the same date, the entity purchased a mining equipment which can only be used for the extraction of the recoverable deposits. The cost of the equipment is 15,000,000, the estimated useful life is 8 years, and the residual value is P3,000,000.The entity was able to extract 5,500 units in 2018, and 11,800 units in 2019. How much is the depreciation expense in 2018?
Q5. EL Corporation, an entity under the mining industry, incurred a total of 20,000,000 on March 31, 2018 for the acquisition, exploration, and development of its wasting asset. The entity estimates that a total of 50,000 units of recoverable deposits can be extracted within 5 years. On the same date, the entity purchased a mining equipment which can only be used for the extraction of the recoverable deposits. The cost of the equipment is 15,000,000, the estimated useful life is 8 years, and the residual value is P3,000,000.The entity was able to extract 5,500 units in 2018, and 11,800 units in 2019. What is the carrying value of the wasting asset as of December 31, 2019?
Q6. EL Corporation, an entity under the mining industry, incurred a total of 20,000,000 on March 31, 2018 for the acquisition, exploration, and development of its wasting asset. The entity estimates that a total of 50,000 units of recoverable deposits can be extracted within 5 years. On the same date, the entity purchased a mining equipment which can only be used for the extraction of the recoverable deposits. The cost of the equipment is 15,000,000, the estimated useful life is 8 years, and the residual value is P3,000,000.The entity was able to extract 5,500 units in 2018, and 11,800 units in 2019. What is the carrying value of the mining equipment as of December 31, 2019?
Q7. On January 1, 2018, EM purchased a patent for a new consumer product for 4,800,000. At the time of purchase, the patent was valid for 10 years. However, the patent's useful life was estimated to be only 8 years due to the competitive nature of the product. On December 31, 2020, the product was permanently withdrawn from sale under government order because of a potential health hazard in the product. What amount should EM charge against income during 2020, assuming amortization is recorded at the end of the year?
Q8. On January 1, 2021, EN Company had capitalized cost of 5,000,000 for a new computer software with an economic life of 5 years. Sales for 2021 amounted to 3,000,000. The total sales of software over its economic life are expected to be 10,000,000. The pattern of future sales cannot be measured reliably. On December 31, 2021, the software had a net realizable value of 4,500,000. What net amount of the capitalized software cost should be reported on December 31, 2021 statement of financial position?