RCG Company, purchased machinery to be used in production for P6,500,000 on April 1, 2017. The machine had a 5-year life, P500,000 residual value, and was depreciated using the double declining balance method. On January 1, 2020 a test for impairment indicated that the undiscounted cash flows from the machine are less than its carrying value. The machine's value in use on January 1, 2020 is P1,100,000. 1. What is the loss on impairment?
RCG Company, purchased machinery to be used in production for P6,500,000 on April 1, 2017. The machine had a 5-year life, P500,000 residual value, and was depreciated using the double declining balance method. On January 1, 2020 a test for impairment indicated that the undiscounted cash flows from the machine are less than its carrying value. The machine's value in use on January 1, 2020 is P1,100,000. 1. What is the loss on impairment?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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RCG Company, purchased machinery to be used in production for
P6,500,000 on April 1, 2017. The machine had a 5-year life, P500,000 residual value, and was
impairment indicated that the undiscounted
1. What is the loss on impairment?
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