• Compute the Impairment Loss of CGU• Compute the Carrying amount of Inventory, AR, PPE(net), Patent and Goodwill after the Impairment At year-end, Burglar Company has a cash generating unitwith the following assets at carrying amount:InventoryAccounts receivablePlant and equipmentAccumulated depreciationPatentGoodwili200,000300,0006,000,0002,600,000oo 850,000100,000The accounts receivable are regarded as collectible and theinventory has a fair value less cost of disposal which is equal tothe carrying amount. The patent has a fair value less cost ofdispotal of P750,000.At year-end, the entity determined the value in use of the unitat P4,050,000.

In the given question, a Cash generating unit is given and we need to compute the impairment loss of…

Accounts receivable Plant and equipment Accumulated depreciation Patent Goodwili 300,000 6,000,000 2,600,000 réd 850,000 100,000 The accounts receivable are regarded as collectible and the inventory has a fair value less cost of disposal which is equal to the carrying amount. The patent has a fair value less cost of dispotal of P750,000. At year-end, the entity determined the value in use of the unit at P4,050,000.

Accounts receivable Plant and equipment Accumulated depreciation Patent Goodwili 300,000 6,000,000 2,600,000 réd 850,000 100,000 The accounts receivable are regarded as collectible and the inventory has a fair value less cost of disposal which is equal to the carrying amount. The patent has a fair value less cost of dispotal of P750,000. At year-end, the entity determined the value in use of the unit at P4,050,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question

• Compute the Impairment Loss of CGU • Compute the Carrying amount of Inventory, AR, PPE(net), Patent and Goodwill after the Impairment

At year-end, Burglar Company has a cash generating unit
with the following assets at carrying amount:
Inventory
Accounts receivable
Plant and equipment
Accumulated depreciation
Patent
Goodwili
200,000
300,000
6,000,000
2,600,000
oo 850,000
100,000
The accounts receivable are regarded as collectible and the
inventory has a fair value less cost of disposal which is equal to
the carrying amount. The patent has a fair value less cost of
dispotal of P750,000.
At year-end, the entity determined the value in use of the unit
at P4,050,000.

Definition Definition Intangible asset that includes proprietary or intellectual property and brand value of a firm. Goodwill is recorded in the books when a firm purchases another firm and the purchase price is more than the fair value of net identifiable assets of the acquired business. The amount of goodwill is recorded on the asset side of the balance sheet (statement of financial position).

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