PROBLEM N: At the beginning of 2018, Downtown Company acquired an intangible asset for P3,000,000. The intangible asset has an estimated useful life of 10 ears. At the end of 2018, the intangible asset was evaluated to determine whether it was impaired. On same date, the following information are available: Fair value, 12/31/2018 Cost to be incurred if the intangible asset is to be disposed on December 31, 2018 2,100,000 100,000 The asset is expected to generate future cash flows of P300,000 annually for the remaining 9 years. The appropriate discount rate is 5%. The present value of an ordinary annuity of 1 at 5% for nine periods is 7.11. 21. What is the impairment loss to be recognized for 2018? A. 0 B. 567,000 C. 600,000 D. 700,000 22. The carrying amount of an intangible is A. the fair value of the asset at a balance sheet date. B. the asset's acquisition cost less the total related amortization recorded to date. C. equal to the balance of the related accumulated amortization account. D. the assessed value of the asset for intangible tax purposes.
PROBLEM N: At the beginning of 2018, Downtown Company acquired an intangible asset for P3,000,000. The intangible asset has an estimated useful life of 10 ears. At the end of 2018, the intangible asset was evaluated to determine whether it was impaired. On same date, the following information are available: Fair value, 12/31/2018 Cost to be incurred if the intangible asset is to be disposed on December 31, 2018 2,100,000 100,000 The asset is expected to generate future cash flows of P300,000 annually for the remaining 9 years. The appropriate discount rate is 5%. The present value of an ordinary annuity of 1 at 5% for nine periods is 7.11. 21. What is the impairment loss to be recognized for 2018? A. 0 B. 567,000 C. 600,000 D. 700,000 22. The carrying amount of an intangible is A. the fair value of the asset at a balance sheet date. B. the asset's acquisition cost less the total related amortization recorded to date. C. equal to the balance of the related accumulated amortization account. D. the assessed value of the asset for intangible tax purposes.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Explain both in detail
Transcribed Image Text:PROBLEM N:
At the beginning of 2018, Downtown Company acquired an intangible asset for P3,000,000. The intangible asset has
an estimated useful life of 10 ears.
At the end of 2018, the intangible asset was evaluated to determine whether it was impaired. On same date, the
following information are available:
Fair value, 12131/2018
Cost to be incurred if the intangible asset is to be disposed on December 31, 2018
2,100,000
100,000
The asset is expected to generate future cash flows of P300,000 annually for the remaining 9 years. The appropriate
discount rate is 5%. The present value of an ordinary annuity of 1 at 5% for nine periods is 7.11.
21. What is the impairment loss to be recognized for 2018?
A. 0
B. 567,000
C. 600,000
D. 700,000
22. The carrying amount of an intangible is
A. the fair value of the asset at a balance sheet date.
B. the asset's acquisition cost less the total related amortization recorded to date.
C. equal to the balance of the related accumulated amortization account.
D. the assessed value of the asset for intangible tax purposes.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education