On January 1, 2022, Christine Company acquired a trademark for P3,000,000. The trademark has eight years remaining in the legal life. It is anticipated that the trademark will be renewed in the future indefinitely without problem. On December 31, 2022, the trademark is assessed for impairment. Because of a decline in economy, the trademark is expected to generate cash flows of just P120,000 annually. The useful life of the trademark still extends beyond the foreseeable horizon. The appropriate discount rate is 6%. What amount should be recognized as impairment loss on trademark for 2022? A. 1,000,000 B. 2,000,000 C. 3,000,000 D. Zero

On January 1, 2022, Christine Company acquired a trademark for P3,000,000. The trademark has eight years remaining in the legal life. It is anticipated that the trademark will be renewed in the future indefinitely without problem. On December 31, 2022, the trademark is assessed for impairment. Because of a decline in economy, the trademark is expected to generate cash flows of just P120,000 annually. The useful life of the trademark still extends beyond the foreseeable horizon. The appropriate discount rate is 6%. What amount should be recognized as impairment loss on trademark for 2022? A. 1,000,000 B. 2,000,000 C. 3,000,000 D. Zero

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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