Depletion IMPAIRMENT OF ASSETS

Problem 30-13, PP 869 Problem 32-23

1 8
150000 1
1200000 A

2 2000000
1000000 C

Problem 30-14, PP 869

1 37950000
0.3
11385000 A Problem 32-24

Problem 30-15, PP 870 1

1 32000000
5000000
27000000 2.7
8100000 C

2 6000000 2
3.15
11025000 B

Problem 32-25

1
2

4
IMPAIRMENT OF ASSETS
Problem 32-23

Carrying amount - 12/31/22 7,000,000.00

Depreciable for 2022 (7,000,000*20%) 1,400,000.00
Carrying amount with impairment - 12/3 5,600,000.00

Carrying amount with no impairment 7,200,000.00

Carrying amount with impairment 5,600,000.00
Gain on reversal of impairment for 2022 1,600,000.00 C

Problem 32-24

Cost of Equipment ###

Accumulated Depreciation 1,100,000.00
Carrying amount 9,900,000.00
Recoverable amount in 2021 8,550,000.00
Impairment loss for 2021 1,350,000.00 A

Depreciation for 2022 1,100,000.00

Impairment loss 1,350,000.00
Depreciation for 2021 (8550000/9) 950,000.00
Total 3,400,000.00

Equipment ###
Accumulated Depreciation 3,400,000.00
Carrying amount with impairment 7,600,000.00

Recoverable amount - 12/31/21 8,400,000.00

Carrying amount with impairment - 12/3 7,600,000.00
Gain on reversal of impairment for 2022 800,000.00 B

Depreciation for 2023

8400000/8 1,050,000.00 A

Problem 32-25

Cost of a building ###

Accumulated Depreciation - 12/31/25 5,000,000.00
Carrying amount - 12/31/25 ###
Fair value - 12/31/25 ###
Impairment loss for 2025 3,000,000.00 A

Carrying amount - 12/31/25 ###

Accumulated Depreciation for 2026 2,400,000.00
Carrying amount - 12/31/26 9,600,000.00
Accumulated Depreciation for 2027 1,600,000.00

Carrying amount - 12/31/25 ###

Accumulated Depreciation for 2027 1,600,000.00
Gain on reversal of impairment for 2027 ### A

Carrying amount with no impairment - 1 ###

Carrying amount with impairment - 12/3 ###
Gain on reversal of impairment for 2027 2,600,000.00 C

Fair value - 12/31/27 ###

Adjusted carrying amount ###
Revaluation surplus on 2027 5,000,000.00 A
Depletion Impairment of Assets
Problem 30-20 pp 873 Problem 32-26pp933-934
1D 1B
2A 2C
3A 3A
4C 4A
5C 5B
6B
7A
8D
9D
10 B
INVESTMENT PROPERTY INVESTMENT PROPERT
Prob 22-9 Prob 22-10

1. purchase price (200,000,000x 9/10) 180,000,000 1

add: nonrefundable taxes (20,000,000 x 9/10) 18,000,000
legal cost (1,000,000 x 9/10) 900,000
initial cost of investment property 198,900,000
Ans. A 2

2. Purchase price (200,000,000 x 1/10 x 20 4,000,000

nonrefundable taxes (20,000,000 x 1/10 x 20% 400,000
legal cost (1,000,000 x 1/10 x 20%) 20,000
Initial cost Land-PPe 4,420,000
Ans: B

3. ANS C
purch price (200,000,000 x 1/10x 80 16,000,000
nonrefund tax (20,000,000 x 1/10x 80% 1,600,000
legal cost (1,000,000 x1/10x80%) 80,000
Initial cost building-PPE 17,680,000

4. FV (25,000,000 x 9) 225,000,000
CA 198,900,000
Gain from change in FV 26,100,000
ANS: D

5. Depreciation = 17, 680, 000

50
depreciation= 353,600
ANS: A

Alternative Solution
Purchase Price ###
Non Refundable transfer taxes not included 20,000,000.00
Legal Cost Directly Attributable 1,000,000.00
###

1. Investment Property =221,000,000*9/10 A. 198,900,000

2. Land - PPE =221,000,000*1/10*0.2 B. 4,420,000

3. Building - PPE =221,000,000*1/10*0.8 C. 17,680,000

4. Gain =(25,000,000*9)-198,900,000 D. 26,100,000

5. Depreciation Building 2021=17,680,000/50 A. 353,600

INVESTMENT PROPERTY
Prob 22-10

INTANGIBLE ASSETS
Fair Value, 10/31/21 ₱35,000,000.00 Problem 33-15
Carrying Amount 10/31/21 (20,000,000.00)
Revaluation Surplus ₱15,000,000.00 C 1 Net earnings
Expropriation loss
Fair Value, 10/31/21 ₱15,000,000.00 Adjusted net earnings
Carrying Amount 10/31/21 (10,000,000.00) divided by
Profit or Loss ₱5,000,000.00 C Annual average earnings
Normal earnin
Average excess earnings
multiplied by
Goodwill

2 Average excess earnings

divided by
Goodwill

3 Annual average earnings

multiplied by
Goodwill

4 Annual average earnings

divided by
Net assets
Net assets before goodwill
Goodwill

5 Average excess earnings

multiplied by
Goodwill
TANGIBLE ASSETS
oblem 33-15 Problem 34-15

16,500,000 Cost of Patents

propriation loss 1,500,000 Accumulated Amortization for 5 yrs
justed net earnings 18,000,000 =(6,000,000/15)*5
5 Carrying Amount - 01/01/21
nual average earnings 3,600,000 Divide: 5 years
(10,000,000 x 20%) -2,000,000 Amortization Beginning 2021
erage excess earnings 1,600,000
5 Problem 34-16
8,000,000 A Ammortization (4,500,000/10)

erage excess earnings 1,600,000 Problem 34-18

25% Cost of Patent
6,400,000 B Accumulated Amortization ((5,400,000/6)*
Carrying Amount
nual average earnings 3,600,000 Divide: New legal and useful life
3 Amortization, 2021
10,800,000 A
Problem 34-19
nual average earnings 3,600,000 Design Cost
25% Legal Fees
14,400,000 Registration Fee
t assets before goodwill 10,000,000 Cost of Trademarks
4,400,000 C
Problem 34-20
erage excess earnings 1,600,000 Purchase price
3.6 Non Refundable VAT
5,760,000 C Legal Cost
Cost of trademark

Problem 35-1
1 Legal and registration fees
Cost of Patent

2 Development Cost
Add: Additional Cost
Total
3 Amortization of Patent (1,000,000/5)
Amortization of Development Cost (7,000,
Amortization of Intangible Assets

Problem 35-14
1 Duplicate Computer Software & training m
Packaging Product
Inventory

2 Completion of detailed program design

Costs incurred for coding and testing
Total Expenses

Other coding costs after technological fea

Other testing costs after technological fea
Cost of producing product masters
Capitalized as software cost
 6,000,000.00
ortization for 5 yrs
-2,000,000.00
4,000,000.00
5.00
inning 2021 800,000.00 C

,500,000/10) 450,000.00 A

5,400,000.00
ortization ((5,400,000/6)*2 1,800,000.00
3,600,000.00
and useful life 20.00
180,000.00 C

1,500,000.00
150,000.00
50,000.00
1,700,000.00 A

1,000,000.00
50,000.00
105,000.00
1,155,000.00 B

1,000,000.00
1,000,000.00 A

5,000,000.00
2,000,000.00
7,000,000.00 B
 atent (1,000,000/5) 200,000.00
evelopment Cost (7,000,0 1,400,000.00
ntangible Assets 1,600,000.00 A

ter Software & training mat ₱2,500,000.00

900,000.00
₱3,400,000.00 B

tailed program design ₱1,300,000.00

r coding and testing 1,000,000.00
₱2,300,000.00 B

ts after technological feasib ₱2,400,000.00

ts after technological feasib 2,000,000.00
g product masters 1,500,000.00
₱5,900,000.00 C
Investment Property LEC Intangible Assets
Problem 22-17 pp 653-655 Problem 33-16 pp967
1C 1D
2B 2C
3D 3D
4B 4C
5C 5B
6B
7A Problem 34-25 pp999
8A 1D
9A 2D
10 D
Problem 34-26 pp1000
3C
4C

Problem 34-27
1C
5D

Problem 35-19
1D
2D
3D
4A
5C