Sta Elena Construction & Development Corporation purchased a construction crane on January 1, 2019 for P25,000,000. Depreciation is computed using the Straight Line method with a 20 year useful life and 10% residual value. On December 31, 2022, the entity determined that indicators of impairment exist for the asset. On this date, the entity estimated that the crane has a remaining useful life of 10 years, and that its residual value will be zero. It was also determined that the net cash inflows from the asset will total P2,000,000 per year, and that its fair value less cost to sell is P10,000,000. The appropriate discount rate is 8%. 3. How much is the impairment loss on December 31, 2022? a. 18,900,000 b. 7,079,837 c. 20,490,000 d. 11,579,837 4. How much is the depreciation expense in 2023? a. 1,157,984 b. 2,049,000 c. 1,890,000 d. 1,342,016

Sta Elena Construction & Development Corporation purchased a construction crane on January 1, 2019 for P25,000,000. Depreciation is computed using the Straight Line method with a 20 year useful life and 10% residual value. On December 31, 2022, the entity determined that indicators of impairment exist for the asset. On this date, the entity estimated that the crane has a remaining useful life of 10 years, and that its residual value will be zero. It was also determined that the net cash inflows from the asset will total P2,000,000 per year, and that its fair value less cost to sell is P10,000,000. The appropriate discount rate is 8%. 3. How much is the impairment loss on December 31, 2022? a. 18,900,000 b. 7,079,837 c. 20,490,000 d. 11,579,837 4. How much is the depreciation expense in 2023? a. 1,157,984 b. 2,049,000 c. 1,890,000 d. 1,342,016

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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