1.Company A has a product line, consisting of machines X, Y, and Z, to manufacture the product ABC. The sales of the product ABC decreased significantly in 2019. On December 31, 2019, the company tested impairment for the three machines. The product line is identified as an asset group. The company determined that the present value of expected future cash flows from the product line is RMB 650,000. The company cannot estimate the fair value of the product line less costs of disposal. The carrying amounts of machines X, Y, and Z are RMB 240,000, RMB 360,000, and RMB 400,000, respectively. For machine Z, the recoverable amount is RMB 280,000. For machines X and Y, the recoverable amounts cannot be estimated reliably. Calculate impairment loss for machine X on December 31, 2019.

A.RMB 60,000

B.RMB 92,000

C.RMB 120,000

D.RMB 84,000

2.Company A purchased the products of RMB200,000 (exclusive of value-added Tax). Value-added Tax (VAT) rate is 17%. What is the effect of the VAT amount of this transaction for the income statement of company A?

A. No Income statement effect
B. Increase operating expenses by RMB34,000
C. Increase “Taxes and Surcharges” by RMB34,000
D. Decrease “Taxes and Surcharges” by RMB34,000