On December 31, 2020, ABC Company has an item of machinery with a cost of P 4,500,000 and an accumulated depreciation of P 1,800,000. On this date, the machinery is found to be impaired due to obsolescence and a major physical damage. The entity made an assessment and test for recoverability of the asset and determined that the machinery's estimated selling price is P 2,500,000 and estimated disposal cost is P 250,000. The entity expects net future undiscounted cash flows related to the continued use and eventual disposal of the machinery of P 2,600,000. The net future discount cashflows related to the continued use and eventual disposal of the machinery using a discount rate of 10% is P 2.180,000. ABC should report an impairment loss in 2020 of? * O P 450,000 ОР 200,000 O P 100,000 O P 520,000
On December 31, 2020, ABC Company has an item of machinery with a cost of P 4,500,000 and an accumulated depreciation of P 1,800,000. On this date, the machinery is found to be impaired due to obsolescence and a major physical damage. The entity made an assessment and test for recoverability of the asset and determined that the machinery's estimated selling price is P 2,500,000 and estimated disposal cost is P 250,000. The entity expects net future undiscounted cash flows related to the continued use and eventual disposal of the machinery of P 2,600,000. The net future discount cashflows related to the continued use and eventual disposal of the machinery using a discount rate of 10% is P 2.180,000. ABC should report an impairment loss in 2020 of? * O P 450,000 ОР 200,000 O P 100,000 O P 520,000
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:On December 31, 2020, ABC Company has an item of machinery with a cost of P 4,500,000 and
an accumulated depreciation of P 1,800,000. On this date, the machinery is found to be
impaired due to obsolescence and a major physical damage.
The entity made an assessment and test for recoverability of the asset and determined that the
machinery's estimated selling price is P 2,500,000 and estimated disposal cost is P 250,000. The
entity expects net future undiscounted cash flows related to the continued use and eventual
disposal of the machinery of P 2,600,000. The net future discount cashflows related to the
continued use and eventual disposal of the machinery using a discount rate of 10% is P
2,180,000.
ABC should report an impairment loss in 2020 of? *
O P 450,000
O P 200,000
O P 100,000
O P 520,000
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