P11.10 (LO 3) (Impairment) At the end of 2022, Sapporo Group tests a machine for impairment. The machine is carried at depreciated historical cost, and its carrying amount is ¥150,000. It has an estimated remaining useful life of 10 years. The machine's recoverable amount is determined on the basis of a value-in-use calculation, using a pretax discount rate of 15%. Management-approved budgets reflect estimated costs necessary to maintain the level of economic benefit expected to arise from the machine in its current condition. The following information related to future cash flows is available at the end of 2022 (amounts in thousands; round all calculations to the nearest ¥). Year Future Cash Flow Year Future Cash Flow 2023 ¥22,165 2028 ¥24,825 2024 21,450 2029 24,123 2025 20,550 2030 25,533 2026 24,725 2031 24,234 2027 25,325 2032 22,850 Instructions Part I a. Compute the amount of the impairment loss at December 31, 2022. b. Prepare the journal entry to record the impairment loss, if any, at December 31, 2022.

P11.10 (LO 3) (Impairment) At the end of 2022, Sapporo Group tests a machine for impairment. The machine is carried at depreciated historical cost, and its carrying amount is ¥150,000. It has an estimated remaining useful life of 10 years. The machine's recoverable amount is determined on the basis of a value-in-use calculation, using a pretax discount rate of 15%. Management-approved budgets reflect estimated costs necessary to maintain the level of economic benefit expected to arise from the machine in its current condition. The following information related to future cash flows is available at the end of 2022 (amounts in thousands; round all calculations to the nearest ¥). Year Future Cash Flow Year Future Cash Flow 2023 ¥22,165 2028 ¥24,825 2024 21,450 2029 24,123 2025 20,550 2030 25,533 2026 24,725 2031 24,234 2027 25,325 2032 22,850 Instructions Part I a. Compute the amount of the impairment loss at December 31, 2022. b. Prepare the journal entry to record the impairment loss, if any, at December 31, 2022.

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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A company is considering a 3-year project with an initial cost of $876,000. The project will not directly produce any sales but will reduce operating costs by $195,000 a year. The equipment is classified as MACRS 7-year property. The MACRS table values are .1429, .2449, .1749, .1249, .0893, .0892, .0893, and .0446 for Years 1 to 8, respectively. At the end of the project, the equipment will be sold for an estimated $410,000. The tax rate is 25 percent and the required return is 10 percent. An extra $42,000 of inventory will be required for the life of the project. What is the total cash flow for Year 3? $638,821.80 $629,821.80 $620,821.80 $611,821.80 $602,821.80
K88.
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