Topic: Impairment of Asset   Uranus Company has various cash generating units. On December 31,2014, one cash generating unit has the following carrying amount of assets: Cash                                            600,000 Inventory                                  1,400,000 Land                                          2,500,000 Plant and equipment                 9,000,000 Accumulated depreciation        1,500,000) Goodwill                                    1,000,000 Carrying amount                      13,000,000   The management determined the value in use of the cash generating unit at P8,500,000.   The fair value less cost of disposal for the inventory was greater than the carrying amount.   Required: Prepare journal entry to recognize the impairment loss.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Topic: Impairment of Asset
 
Uranus Company has various cash generating units. On December 31,2014, one cash
generating unit has the following carrying amount of assets:
Cash                                            600,000
Inventory                                  1,400,000
Land                                          2,500,000
Plant and equipment                 9,000,000
Accumulated depreciation        1,500,000)
Goodwill                                    1,000,000
Carrying amount                      13,000,000
 
The management determined the value in use of the cash generating unit at P8,500,000.
 
The fair value less cost of disposal for the inventory was greater than the carrying amount.
 
Required:
Prepare journal entry to recognize the impairment loss.
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