In January 2015, Genesis Company purchased equipment at a cost of P 5,000,000. The equipment had an estimated residual value of P 1,000,000, an estimated 8- year useful life, and was being depreciated by the straight line method. Two- years later, it became apparent that this equipment suffered a permanent impairment of value. In January 2017, management determined the carrying amount should be only P1,750,000 with a 2 year remaining useful life, and the residual value should be reduced to P 250,000. What is the impairment loss for 2016?

In January 2015, Genesis Company purchased equipment at a cost of P 5,000,000. The equipment had an estimated residual value of P 1,000,000, an estimated 8- year useful life, and was being depreciated by the straight line method. Two- years later, it became apparent that this equipment suffered a permanent impairment of value. In January 2017, management determined the carrying amount should be only P1,750,000 with a 2 year remaining useful life, and the residual value should be reduced to P 250,000. What is the impairment loss for 2016?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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