9. The assets and liabilities of a manufacturing plant of Joy Company form a disposal group. The criteria ification are met on January 1, 2020, As of January 1, 2020 its carrying amount of the assets and liabilities are as follows: Goodwill allocated 200,000,000 Land and building 150,000,000 Plant, machinery and equipment Investment property 491,700,000 130,000,000 Receivables and financial assets 75,000,000 110,000,000 Inventories, net of writedown Borrowings Carrying Value (300,000,000) 856,700,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Case 9. The assets and liabilities of a manufacturing plant of Joy Company form a disposal group. The criteria for
classification are met on January 1, 2020, As of January 1, 2020 its carrying amount of the assets and liabilities of the
plant are as follows:
Goodwill allocated
200,000,000
Land and building
150,000,000
Plant, machinery and equipment
Investment property
491,700,000
130,000,000
Receivables and financial assets
75,000,000
110,000,000
Inventories, net of writedown
Borrowings
Carrying Value
(300,000,000)
856,700,000
The investment property has been reported at its current fair value at the reporting date December 31, 2020. The
receivables and financial assets were properly valued at 75,000,000. The inventories were properly valued at net realizable
value at the reporting date.
Negotiations to dispose of the manufacturing plant to JIT company is in the advanced stage and the buyer is willing to pay
a price of 603,400,000 to buy the plant as a whole. Cost to sell is estimated at 1,700,000.
9. What amount of loss should be recognized in the profit or loss at the time the plant was reclassified as a disposal
group?
Transcribed Image Text:Case 9. The assets and liabilities of a manufacturing plant of Joy Company form a disposal group. The criteria for classification are met on January 1, 2020, As of January 1, 2020 its carrying amount of the assets and liabilities of the plant are as follows: Goodwill allocated 200,000,000 Land and building 150,000,000 Plant, machinery and equipment Investment property 491,700,000 130,000,000 Receivables and financial assets 75,000,000 110,000,000 Inventories, net of writedown Borrowings Carrying Value (300,000,000) 856,700,000 The investment property has been reported at its current fair value at the reporting date December 31, 2020. The receivables and financial assets were properly valued at 75,000,000. The inventories were properly valued at net realizable value at the reporting date. Negotiations to dispose of the manufacturing plant to JIT company is in the advanced stage and the buyer is willing to pay a price of 603,400,000 to buy the plant as a whole. Cost to sell is estimated at 1,700,000. 9. What amount of loss should be recognized in the profit or loss at the time the plant was reclassified as a disposal group?
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