Question 3 Marked out of 4.00 Zany Company purchased a department store building on January 1, 20x1 for P20,000,000. The building has been depreciated using the straight line method with a 20-year useful life and 10% residual value. On January 1, 20x7, the entity has converted the building into a hotel and restaurant. The entity estimated that the building has a remaining useful life of 10 years, residual value of zero, undiscounted net cash flows from the building will be P1,200,000 per year and that the fair value less cost of disposal is P8,000,000. The appropriate discount rate is 12%. The present value of an ordinary annuity of 1 at 12% for 10 periods is 5.65. The present value of 1 at 12% for 10 periods is 0.32 Q1) How much is the carrying amount of the building on January 1, 20x7? Q2) How much is the value in use? Q3) How much is the impairment loss? Q4) How much is the depreciation expense for 20x7?