PROBLEM 18 Bunny Company has a department that performs machining operations on parts that are sold to contractors. A group of machines had an aggregate carrying amount of P7,380,000 on December 31, 2021. This group of machinery has been determined to constitute a cash generating unit for purposes of applying IAS 36 Impairment of Assets Presented below are data about future expected cash inflows and outflows based on the diminishing productivity expected of the machinery as it ages and the increasing costs that will be incurred to generate output from the machines: Year. Revenues: 2022 4,500,000 2023 4,800,000 2024 3,900,000 2025 1,200,000 Cost, excluding depreciation: 1,680,000 2,520,000 3,300,000 900,000 The fair value of the machinery in this cash generating unit, net of estimated disposal costs, is determined to amount to P5,070,000. The company discounts the future cash flows of this cash generating unit by using a 5% discount rate. Relevant present value factors are given below: Present value of 1 at 5% for 1 period 0.95238 Present value of 1 at 5% for 2 periods 0.90703 Present value of 1 at 5% for 3 periods 0.86384 Present value of 1 at 5% for 4 periods 0.82270 Present value of 1 at 5% for 5 periods 0.78353 27. How much impairment loss should be recognized at December 31, 2021? A. O B. 448,854 C. 1,861,146 D. 2,310,000