Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

At the beginning of current year, Cebu Company acquired all the assets and liabilities of another entity. The acquiree has a number of operating divisions,

At the beginning of current year, Cebu Company acquired all the assets and liabilities of another entity. The acquiree has a number of operating divisions, including one whose major industry is the manufacture of toy train. The toy train division is regarded as a cash generating unit. In paying P20,000,000 for the net assets of the acquiree, Cebu calculated that it had acquired goodwill of P2,400,000. The goodwill was allocated to each of the divisions, and the assets and liabilities acquired are measured at fair value at acquisition date. At year-end, the carrying amounts of the assets of the toy train division were: Building 2,000,000 Inventory 1,500,000 Trademark 1,000,000 Goodwill 500,000 There is a declining interest in toy train because of the aggressive marketing of computer-based toys. The entity measured the value in use of the toy train division at year-end at P3,600,000. 6.1 What is the impairment loss on goodwill? A. 0 C. 250,000 B. 140,000 D. 500,000 6.2 What is the impairment loss to be allocated to the building? A. 300,000 C. 500,000 B. 400,000 D. 900,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Discrete Mathematics

Authors: Gary Chartrand, Ping Zhang

1st Edition

1478616261, 9781478616269

More Books

Students also viewed these Mathematics questions

Question

What is a jumbo mortgage? ( LG 7-5 )

Answered: 1 week ago