Quiz - Module 10 PDF

12/16/2020 Quiz - Module 10
Quiz - Module 10 Total points 19/20
The respondent's email address (alyannashane.alcantara@antipolo.benilde.edu.ph) was

recorded on submission of this form.
What total amount should be recognized as impairment loss for the 1/1
year? *
5,105,000
4,000,000
1,105,000
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12/16/2020 Quiz - Module 10
On January 1, 2014, Reed Company purchased a machine for 1/1

P8,000,000 and established an annual depreciation charge of
P1,000,000 over an eight-year life.During 2017, after issuing the 2016
financial statements, the entity concluded that the machine suffered
permanent impairment and P2,000,000 is a reasonable estimate of the
amount expected to be recovered through use of the machine for the
period January 1, 2017 through December 31, 2021.What is the
impairment loss for 2016? *
2,000,000
4,000,000
3,000,000
The internal sources of information indicating possible impairment 1/1

include all of the following except *
Significant change in the manner or extent in which the asset is used with an
adverse effect on the entity
Evidence that the economic performance of an asset will be worse than expected
Obsolescence or physical damage of an asset
Significant decrease in the market value of the asset
12/16/2020 Quiz - Module 10
In January 2015, Winn Company purchased equipment at a cost of 1/1

P5,000,000. The equipment had an estimated residual value of
P1,000,000, an estimated 8-year useful life and was being depreciated
by straight line method.Two years later, it became apparent that this
equipment suffered a permanent impairment of value.In January 2017,
management determined the carrying amount should be only
P1,750,000 with a 2 year remaining useful life, and the residual value
should be reduced to P250,000. On December 31, 2017, what is the
carrying amount of the equipment? *
1,500,000
1,000,000
1,750,000
3,500,000
What is the best evidence of fair value? * 1/1
Quoted price in an inactive market for similar asset
Quoted price in an active market for identical asset
Quoted price in an inactive market for identical asset
Quoted price in an active market for similar asset
12/16/2020 Quiz - Module 10
Lobo Company reported an impairment loss of P2,000,000 in 2015. This 1/1

loss was related to an item of PPE which was acquired on January 1, 2014
with the cost of P10,000,000 useful life of 10 years and no residual value.
The straight line method is used in recording depreciation. On December
31, 2015, the entity reported this asset at P6,000,000 which is the fair
value on the same date.On December 31, 2016, the entity determined
that the fair value of the impaired asset had increased to
P7,500,000.What amount of gain on reversal of impairment should be
reported in the income statement for 2016? *
1,750,000
2,250,000
1,500,000
In January 2015, Winn Company purchased equipment at a cost of 1/1

P5,000,000. The equipment had an estimated residual value of
P1,000,000, an estimated 8-year useful life and was being depreciated
by straight line method.Two years later, it became apparent that this
equipment suffered a permanent impairment of value.In January 2017,
management determined the carrying amount should be only
P1,750,000 with a 2 year remaining useful life, and the residual value
should be reduced to P250,000. What is the impairment loss for 2016? *
3,250,000
4,000,000
2,250,000
12/16/2020 Quiz - Module 10
What amount should be recognized as impairment loss for 2016? * 1/1
300,000
500,000
400,000
What is impairment of an asset? * 0/1
A decline in value of an asset so that the recoverable amount is more than the
carrying amount.
A change in the estimated useful life of an asset.
A fall in the market value of an asset so that the recoverable amount is less than the
carrying amount.
An allocation of cost over the useful life on asset.
12/16/2020 Quiz - Module 10
Which of the following is not relevant in determining the value in use? * 1/1
Expectation about possible variation in the amount and timing of future cash flows.
The expected future cash flows from the asset
The carrying amount of the asset
The time value of money
FIRST NAME *
Alyanna Shane
SECTION *
BFAC01
BFAC02
Which of the following is not cost of disposal? * 1/1
Legal cost
Stamp and similar transaction tax
Finance cost
Cost of removing the asset
12/16/2020 Quiz - Module 10
On January 1, 2014, Reed Company purchased a machine for 1/1

P8,000,000 and established an annual depreciation charge of
P1,000,000 over an eight-year life.During 2017, after issuing the 2016
financial statements, the entity concluded that the machine suffered
permanent impairment and P2,000,000 is a reasonable estimate of the
amount expected to be recovered through use of the machine for the
period January 1, 2017 through December 31, 2021. What is the carrying
amount of the machine on December 31, 2017? *
1,600,000
4,000,000
1,000,000
Value in use of an asset is equal to * 1/1
Undiscounted future net cash flows from the use of the asset
Undiscounted future net cash flows from the use and eventual disposition of the
asset
Discounted future net cash flows from the use of the asset
Discounted future net cash flows from the use and eventual disposition of the
asset
12/16/2020 Quiz - Module 10
Which of the following best describes the higher of FVLCD and VIU? * 1/1
Carrying amount
revalued amount
Recoverable amount
Depreciable Amount
At what amount should the equipment be reported on December 31, 1/1

2016? *
1,350,000
1,400,000
1,300,000
1,600,000
SURNAME *
Alcantara
12/16/2020 Quiz - Module 10
The estimates of future cash flows in calculating value in use include all 1/1
of the following except *
Cash outflows incurred to generate the cash inflows from the continuing use of the
asset
Net cash flows from the disposal of the asset at the end of the useful life
Cash inflows from the continuing use of the asset
Future cost of improving or enhancing the performance of the asset
On January 1, 2016, Zimbabwe Company has a machinery with a cost of 1/1

P5,000,000 and accumulated depreciation of P1,500,000.The
machinery was acquired on January 1, 2013 and had been depreciated
using the straight line method with useful life of 10 years and no residual
value. On January 1, 2016, the entity has properly tested the machine to
be impaired. The machinery has a remaining life of 5 years and is
expected to generate undiscounted net cash inflows of P800,000 per
year. The fair value of the machinery on January 1, 2016 is
P3,000,000.The appropriate discount rate is 8%. The present value of an
ordinary annuity of 1 at 8% for 5 periods is 3.99.What mount should be
recognized as impairment loss for 2016? *
500,000
308,000
808,000
12/16/2020 Quiz - Module 10
Gei Company determined that due to obsolescence, equipment with an 1/1

original cost of P9,000,000 and accumulated depreciation on January 1,
2016 of P4,200,000 had suffered permanent impairment and as a result
should have a carrying amount of only P3,000,000 as of the beginning
of the year.In addition, the remaining useful life of the equipment was
reduced from 8 years to 3.On December 31, 2016, what amount should
be reported as accumulated depreciation? *
1,000,000
7,000,000
5,200,000
6,000,000
On January 1, 2016, Zimbabwe Company has a machinery with a cost of 1/1

P5,000,000 and accumulated depreciation of P1,500,000.The
machinery was acquired on January 1, 2013 and had been depreciated
using the straight line method with useful life of 10 years and no residual
value. On January 1, 2016, the entity has properly tested the machine to
be impaired. The machinery has a remaining life of 5 years and is
expected to generate undiscounted net cash inflows of P800,000 per
year. The fair value of the machinery on January 1, 2016 is
P3,000,000.The appropriate discount rate is 8%. The present value of an
ordinary annuity of 1 at 8% for 5 periods is 3.99. What is the depreciation
of the machinery for 2016? *
319,200
638,400
600,000’
300,000
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12/16/2020 Quiz - Module 10
All of the following statements are true with regard to impairment of 1/1
asset, except *
If the recoverable amount is lower than the carrying amount, an impairment loss is
recognized.
If recoverable amount is higher than carrying amount, no impairment loss is

recognized.
The impairment test compares the carrying amount with the lower of fair value
less costs of disposal and value in use
If impairment indicators are present, the entity must conduct an impairment test
This form was created inside of De La Salle-College of Saint Benilde.
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12/16/2020 Quiz - Module 10

Quiz - Module 10 Total points 19/20

The respondent's email address (alyannashane.alcantara@antipolo.benilde.edu.ph) was

On January 1, 2014, Reed Company purchased a machine for 1/1

The internal sources of information indicating possible impairment 1/1

Obsolescence or physical damage of an asset

Significant decrease in the market value of the asset

In January 2015, Winn Company purchased equipment at a cost of 1/1

What is the best evidence of fair value? * 1/1

Quoted price in an inactive market for similar asset

Quoted price in an active market for identical asset

Quoted price in an inactive market for identical asset

Quoted price in an active market for similar asset

Lobo Company reported an impairment loss of P2,000,000 in 2015. This 1/1

In January 2015, Winn Company purchased equipment at a cost of 1/1

What amount should be recognized as impairment loss for 2016? * 1/1

What is impairment of an asset? * 0/1

A change in the estimated useful life of an asset.

An allocation of cost over the useful life on asset.

The expected future cash flows from the asset

The carrying amount of the asset

The time value of money

Which of the following is not cost of disposal? * 1/1

Stamp and similar transaction tax

Cost of removing the asset

On January 1, 2014, Reed Company purchased a machine for 1/1

Value in use of an asset is equal to * 1/1

At what amount should the equipment be reported on December 31, 1/1

Cash inflows from the continuing use of the asset

Future cost of improving or enhancing the performance of the asset

On January 1, 2016, Zimbabwe Company has a machinery with a cost of 1/1

Gei Company determined that due to obsolescence, equipment with an 1/1

On January 1, 2016, Zimbabwe Company has a machinery with a cost of 1/1

If recoverable amount is higher than carrying amount, no impairment loss is

This form was created inside of De La Salle-College of Saint Benilde.

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