Xavier Company had three segments, A, B and C. Segment C is deemed inconsistent with the long-term direction of the entity. Management had decided to dispose of Segment C. On November 15, 2023, the board of directors voted to approve the disposal. On that date the carrying amount of Segment C's net assets was P90,000,000 and the fair value less cost of disposal was P70,000,000. Segment C's revenue and expenses for 2023, respectively, were P50,000,000 and P45,000,000, including an interest expense of P5,000,000 attributable to Segment C. There was no further impairment of assets between November 15 and December 31, 2023. The income tax rate is 25%. What amount of loss from discontinued operation should be reported for 2023? a. 15,000,000 b. 11,250,000 c. 10,000,000 d. 20,000,000

Xavier Company had three segments, A, B and C. Segment C is deemed inconsistent with the long-term direction of the entity. Management had decided to dispose of Segment C. On November 15, 2023, the board of directors voted to approve the disposal. On that date the carrying amount of Segment C's net assets was P90,000,000 and the fair value less cost of disposal was P70,000,000. Segment C's revenue and expenses for 2023, respectively, were P50,000,000 and P45,000,000, including an interest expense of P5,000,000 attributable to Segment C. There was no further impairment of assets between November 15 and December 31, 2023. The income tax rate is 25%. What amount of loss from discontinued operation should be reported for 2023? a. 15,000,000 b. 11,250,000 c. 10,000,000 d. 20,000,000

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter13: Property Transactions: Determination Of Gain Or Loss, Basis Considerations, And Nonta Xable Exchanges

Section: Chapter Questions

Problem 85P

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N Incorporated plans to dispose a group of assets that form part a disposal group. These assets have the following data on December 31, 2021: Asset Carrying value Inventory 2 million Equipment 5 million Land 20 million Building 15 million Goodwill 3 million Total 45 million The carrying value of the inventory is equal to its net realizable value. On the date of reclassification, the fair value less cost to sell of the disposal group is 40 million. Impairment loss to be recognized on the date of reclassification is: a. 3,000,000 b. 2,000,000 c. 5,000,000 d. Answer not among the choices e. 0 Clear my choice
On December 31, 2026, MATAPAT Company classified as held for sale an equipment with a carrying amount of P5,000,000. On this date, the equipment is expected to be sold for P4,600,000. Reasonable disposal cost to be incurred on sale is expected at P200,000. By December 31, 2027, the equipment had not been sold and management decided to place back the equipment to operations. On same date, the entity estimated that the equipment is expected to be sold at P4,300,000 with disposal cost of P50,000. The carrying amount of the equipment is P4,000,000 on December 31, 2027 if the noncurrent asset is not classified as held for sale. What is the impairment loss in 2026? and What amount should be recognized in profit or loss as a result of reclassification in 2027?
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On December 31, 20X1, management of Plexion Corporation committed to a plan for selling an office building and its related equipment that were, prior to December 31, 20X1, in productive use and classified as Non-Current Assets. Both assets are available for immediate sale. The building has a carrying amount (i.e. net book value) of $838,000 and a fair value less cost to sell of $938,000. The equipment has a carrying amount (i.e. net book value) of $316,000 and a fair value less cost to sell of $238,000. Required: Calculate the amount that each asset will be reported at on the Statement of Financial Position and the amount of any gain or loss that will be reported in the Profit and Loss Statement for the year ended December 31, 20X1. Note: Management expects to sell both assets in 20X2.
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On December 31, 20X1, management of Plexion Corporation committed to a plan for selling an office building and its related equipment that were, prior to December 31, 20X1, in productive use and classified as Non - Current Assets. Both assets are available for immediate sale. The building has a carrying amount (i.e. net book value) of $814,000 and a fair value less cost to sell of $914,000.• The equipment has a carrying amount (i.e. net book value) of $268,000 and a fair value less cost to sell of $214,000. Required: Calculate the amount that each asset will be reported at on the Statement of Financial Position and the amount of any gain or loss that will be reported in the Profit and Loss Statement for the year ended December 31, 20X1. Note: Management expects to sell both assets in 20X 2.
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