32-2

1.

Cash Inflows - Cash Outflows = NCF x Present Value of 1 =

30,000,000 12,000,000 18,000,000 .930 16,740,000

32,500,000 17,500,000 15,000,000 .857 12,855,000

27,500,000 12,500,000 15,000,000 .794 11,910,000

16,000,000 4,000,000 12,000,000 .735 8,820,000

Value in Use 50,325,000

2. Recoverable Amount- 50,325,000 because it is higher than the fair value less cost of disposal

3. CA 65,000,000

RA 50,325,000

IL 14,675,000

JE:

Impairment Loss 14,675,000

Accumulated Depreciation 14,675,000

4.

Machinery 90,000,000

Less: Depreciation 25,000,000

Impairment Loss 14,675,000

50,325,000

50,325,000/4 = 12,581,250 depreciation for the current year

JE:

Depreciation 50,325,000

Accumulated Depreciation 50,325,000

32-6

1.

Building 2,000,000

Inventory 1,500,000

Trademark 1,000,000

Goodwill 500,000

CA of CGU 5,000,000

CA of CGU 5,000,000

Less: VIU 3,600,000

Impairment Loss 1,400,000

Allocated to GW (500,000)

Impairment Loss 900,000

2.

Loss

Building 2,000,000 20/45 x 900,000 400,000

Inventory 1,500,000 15/45 x 900,000 300,000

Trademark 1,000,000 10/45 x 900,000 200,000

4,500,000 900,000

3.

JE:

Impairment Loss 1,400,000

Goodwill 500,000

Inventory 300,000

Trademark 200,000

Building 400,000
32-7

1.

Building 8,000,000

Equipment 4,000,000

Inventory 4,000,000

16,000,000

CA in CGU 16,000,000

Less: VIU` 11,000,000

Impairment Loss 5,000,000

2.

Building 8,000,000 80/160 x 5,000,000 2,500,000

Equipment 4,000,000 40/160 x 5,000,000 1,250,000

Inventory 4,000,000 40/160 x 5,000,000 1,250,000

16,000,000 5,000,000

3.

JE:

Impairment Loss 5,000,000

Building 2,500,000

Equipment 1,250,000

Inventory 1,250,000
32-11 (liboga atay)

Inventory 200,000

Accounts Receivable 300,000

Plants and Equipment 6,000,000

Accumulated Depreciation (2,600,000)

Patent 850,000

Goodwill 100,000

Carrying Amount of CGU 4,750,000

Less: Value in Use 4,050,000

Impairment Loss 700,000

Applicable to Goodwill (100,000)

Applicable to other noncash asset 600,000

Carrying Amount Fraction Loss

Inventory 200,000 20/435

Plants and Equipment 3,400,000 34/435

Patent 750,000 75/435

4,350,000
32-12

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

13,000,000

Less: Value in Use 8,500,000

4,500,000

Allocated to goodwill (1,000,000)

3,500,000

Inventory 1,400,000 14/100x 2,100,000 294,000

Land 2,500,000 25/100 x 2,100,000 525,000

Plant and Equipment 7,500,000 75/100 x 2,100,000 1,575,000

11,400,000 2,394,000

JE:

Impairment loss 2,394,000

Inventory 294,000

Land 525,000

Plant and Equipment 1,575,000

32-15

Machinery 800,000

Accumulated Depreciation (800,000/8x3) 300,000

Carrying Amount 500,000

Less: Recoverable Amount 200,000

Impairment Loss 300,000

New Yearly Depreciation (200,000/5) 40,000

Year 4 Balance Sheet

Carrying Amount 200,000

New Depreciation (40,000)

Carrying Amount- December 31, 2021 160,000

32-16

Depreciation for June 2014 (1,350,000 / 27 months) 50,000

Cost 3,200,000

Accum. depn. – 5/31/2014 (3,200,000 – 500,000) x 33/60 1,485,000

Carrying amount – 5/31/2014 1,715,000

Fair value less cost of disposal 1,350,000

Impairment loss 365,000

32-21

Goodwill Implied Value Loss

Retailing 300,000 250,000 50,000

Service 200,000 100,000 100,000

Financing 400,000 600,000 0

1. C- 50,000
2. B- 100,000
3. D- 0

32-25

1.

Cost 20,000,000

Accum. depn. – 5/31/2025 (20,000,000 x 5/20) 5,000,000

Carrying amount – 5/31/2025 15,000,000

Fair value less cost of disposal 12,000,000

Impairment loss 3,000,000- A

2.

New Carrying Amount (Fair Value) 12,000,000

Accumulated Depreciation (12M/15x2) (1,600,000)

Carrying Amount – 12/31/27 10,400,000-A

3.

Machinery 20,000,000

AD (20,000,000/20x7) 7,000,000

CA with no impairment 13,000,000

Machinery