Valix Finacc vol 1 Problem 19-23

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 19 Problem 19-23

1.  Value in use (800,000 x 3.99)                                                                                    3,192,000

2.  Impairment loss                                                                                 308,000

            Accumulated depreciation                                                                               308,000

    Machinery                                                                                                                5,000,000 

    Accumulated depreciation                                                                                    1,500,000

    Book value – 1/1/2008                                                                                             3,500,000

    Present value of cash flows – higher than fair value                                              3,192,000

    Impairment loss                                                                                                          308,000

                                                                                                           

3.  Depreciation                                                                                     638,400

            Accumulated depreciation (3,192,000 / 5)                                                         638,400