On January 1, 2018, Kohl Company purchased equipment for P1,200,000 with a useful life of 8 years
Question:
On January 1, 2018, Kohl Company purchased equipment for P1,200,000 with a useful life of 8 years with no residual value. On December 31, 2019, new technology was introduced that would accelerate the obsolescence of the equipment. The entity estimated the present value of the expected future net cash flows on the equipment at P580,000 and the fair value less cost of disposal at P600,000. The entity determined the recoverable amount of the equipment on December 31, 2020 at P570,000. 16. What amount of impairment loss should be recognized for 2019? a. 150,000 b. 330,000 c. 300,000 d. 0 17. What amount of gain on reversal of impairment loss should be recognized for the year 2020? a. 300,000 b. 250,000 c. 70,000 d. 0
Yoon Company provided the following information pertaining to intangible assets: A patent was purchased from Graf Company for P2,500,000 on January 1, 2017, Yoon estimated the remaining life to be 10 years. The patent was carried at Graf's records at a carrying amount of P2,000,000 when sold to Yoon. On January 1, 2018, Yoon estimated that the remaining life of the patent is only 5 years. During 2018. a franchise was purchased from Reymont Company for P5,800.000. In addition, 5% of revenue from the franchise must be paid to Reymont. Revenue from the franchise for 2018 was P35,000,000. The useful life of the franchise is 10 years and a full year's amortization is taken on the year of purchase. Yoon incurred research and development costs of P500,000 in 2018. Yoon estimated that these costs will be recouped by December 31, 2021 18. What is the carrying amount of the intangible assets on December 31, 2018? a. 7,220,000 b. 7,520,000 c. 7,395,000 d. 7,020,000 19. What total amount of expenses should report in the income statement for 2018? a. 3,280,000 b. 1,530,000 c. 1,750,000 d. 2,955,000
Avery Company provided the following data for the year ended December 31, 2018. As a result of uninsured accidents during 2018, personal injury suits for P3,500,000 and P600,000 have been filed against Avery Company. Based on Avery's legal counsel, an unfavorable outcome is possible for the P600,000 suit but an unfavorable outcome approximating P2,500,000 will probably result in the P3,500,000 case. Avery Company owns a foreign subsidiary that has a carrying amount of P5,725,000 and an estimated fair value of P9,500,000. The foreign government has communicated to the entity its intention to expropriate the assets and business of all foreign investors. It is virtually certain that Avery will receive 40% of the fair value as final settlement. Litigation was filed for the recovery of P1,300,000 consulting fee on a failed project during 2018. The legal counsel believed it is more likely than not that the entity" claim will be successful. 20. What amount of total expenses should be recognized as a result of the suits filed against Avery? a. 2,500,000 b. 3,100,000 c. 4,425,000 d. 5,025,000 21. How should the entity treat the recovery of consulting fee? a. Recognize income of P1,300,000 b. Disclose the award of P1,300,000 c. Disclose the award of P650,000 d. No accrual or disclosure