One of the machines of SKEWER PIERCE Co. has suffered physical damage but is still working, although not as well as before it was damaged. The machine does not generate independent cash inflows. The smallest identifiable group of assets that includes the machine and generates cash inflows that are largely independent of the cash inflows from other assets is the production line to which the machine belongs. Information on the machine and the production line is shown below: Carrying amount of machine ₱ 800,000 Fair value less costs of disposal of machine 600,000 Carrying amount of production line 32,000,000 Recoverable amount of production line 36,000,000 Thebudgets/forecasts approved by management reflect no commitment of management to replace the machine. How much is the impairment loss? Please provide solutions. a. 4,000,000 b. 200,000 c. 3,800,000 d. 0
One of the machines of SKEWER PIERCE Co. has suffered physical damage but is still working, although not as well as before it was damaged. The machine does not generate independent cash inflows. The smallest identifiable group of assets that includes the machine and generates cash inflows that are largely independent of the cash inflows from other assets is the production line to which the machine belongs. Information on the machine and the production line is shown below: Carrying amount of machine ₱ 800,000 Fair value less costs of disposal of machine 600,000 Carrying amount of production line 32,000,000 Recoverable amount of production line 36,000,000 Thebudgets/forecasts approved by management reflect no commitment of management to replace the machine. How much is the impairment loss? Please provide solutions. a. 4,000,000 b. 200,000 c. 3,800,000 d. 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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One of the machines of SKEWER PIERCE Co. has suffered physical damage but is still working, although not as well as before it was damaged. The machine does not generate independent cash inflows . The smallest identifiable group of assets that includes the machine and generates cash inflows that are largely independent of the cash inflows from other assets is the production line to which the machine belongs. Information on the machine and the production line is shown below:
Carrying amount of machine ₱ 800,000
Fair value less costs of disposal of machine 600,000
Carrying amount of production line 32,000,000
Recoverable amount of production line 36,000,000
Thebudgets/forecasts approved by management reflect no commitment of management to replace the machine. How much is the impairment loss? Please provide solutions.
a. 4,000,000 b. 200,000 c. 3,800,000 d. 0
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