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(IFRS) One of the cash generating units of Severe Company is the production of liquor. At year-end, the entity believed that the assets of the cash generating unit are impaired based on an analysis of economic indicators. The assets and liabilities of the cash generating unit at carrying amount at year-end are: Cash Accounts receivable Allowance for doubtful accounts Inventory Property, plant and equipment Accumulated depreciation Goodwill Accounts payable Loans payable 4,000,000 6,000,000' 1,000,000 7,000,000 22,000,000 4,000,000 3,000,000 2,000,000 1,000,000 The entity determined that the value in use of the cash generating unit is P30,000,000. The accounts receivable are considered collectible, except those considered doubtful. Required: 1. Determine the carrying amount of the cash generating unit. 2. Determine the impairment loss, if any, of the cash generating. unit. 3. Prepare journal entry to record the impairment loss.

(IFRS) One of the cash generating units of Severe Company is the production of liquor. At year-end, the entity believed that the assets of the cash generating unit are impaired based on an analysis of economic indicators. The assets and liabilities of the cash generating unit at carrying amount at year-end are: Cash Accounts receivable Allowance for doubtful accounts Inventory Property, plant and equipment Accumulated depreciation Goodwill Accounts payable Loans payable 4,000,000 6,000,000' 1,000,000 7,000,000 22,000,000 4,000,000 3,000,000 2,000,000 1,000,000 The entity determined that the value in use of the cash generating unit is P30,000,000. The accounts receivable are considered collectible, except those considered doubtful. Required: 1. Determine the carrying amount of the cash generating unit. 2. Determine the impairment loss, if any, of the cash generating. unit. 3. Prepare journal entry to record the impairment loss.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Problem 30-10 (IFRS) One of the cash generating units of Severe Company is the production of liquor. At year-end, the entity believed that the assets of the cash generating unit are impaired based on an analysis of economic indicators. The assets and liabilities of the cash generating unit at carrying amount at year-end are: Cash Accounts receivable Allowance for doubtful accounts Inventory Property, plant and equipment Accumulated depreciation Goodwill Accounts payable Loans payable 4,000,000 6,000,000 1,000,000 7,000,000 22,000,000 4,000,000 3,000,000 2,000,000 1,000,000 The entity determined that the value in use of the cash generating unit is P30,000,000. The accounts receivable are considered collectible, except those considered doubtful. Required: 1. Determine the carrying amount of the cash generating unit. 2. Determine the impairment loss, if any, of the cash generating. unit. . Prepare journal entry to record the impairment loss.
Transcribed Image Text:Problem 30-10 (IFRS) One of the cash generating units of Severe Company is the production of liquor. At year-end, the entity believed that the assets of the cash generating unit are impaired based on an analysis of economic indicators. The assets and liabilities of the cash generating unit at carrying amount at year-end are: Cash Accounts receivable Allowance for doubtful accounts Inventory Property, plant and equipment Accumulated depreciation Goodwill Accounts payable Loans payable 4,000,000 6,000,000 1,000,000 7,000,000 22,000,000 4,000,000 3,000,000 2,000,000 1,000,000 The entity determined that the value in use of the cash generating unit is P30,000,000. The accounts receivable are considered collectible, except those considered doubtful. Required: 1. Determine the carrying amount of the cash generating unit. 2. Determine the impairment loss, if any, of the cash generating. unit. . Prepare journal entry to record the impairment loss.
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