Problem 11 a. Soln.

AccDep(105x6/12) P 52,500
Should be AccDep 78,750
a. DepExp A 26,250 DepExp P 26,250
AccDep- Machine 26,250

b. DepExp 40,000 (P240,000 / 6) Cost P240,000

B 40,000 AccDep(40x2.5yrs) ( 26,250)
Carrying value P140,000
Impairment loss 15,000 Recoverable amount 125,000
Impairment loss P 15,000
AccDep- Machine B 15,000
Problem 11
c. Depreciation Expense 590,625
AccDep- Building A 590,625

Cost P6,300,000
x 15/20
Carrying value P4,725,000
x 15/120
DepExp P 590,625
 Cost P5,250,000
x 7/10
Problem 11 Carrying value
Recoverable amount
P3,675,000
3,500,000
Impairment loss P 175,000

P3,500,000
d. Retained Earnings 175,000 500,000
AccDep- Building B 175,000 Carrying value P3,000,000
Recoverable amount 3,100,000
DepExp 500,000 (3500/7yrs) Increase in value P 100,000
Limit on recovery
AccDep- Building B 500,000 175,000 x 6/7 P 150,000
AccDep- Building B 100,000
Gain Recovery on Previous Impairment 100,000
 Problem 11
e. DepExp 300,000
AccDep-Building C 300,000

Investment Property- Land 8,000,000

Investment Property- Bldg 12,000,000
AccDep-Building C 2,700,000 (12M/20 x 4.5)
Land 6,500,000
Building 12,000,000
RevSurplus 4.200.000

Investment Property- Land 500,000

Investment Property- Bldg 400,000
FV Gain on Inv Property 900,000
 CV before impairment P700,000
Problem 17 Value in use[140,000 x 3.7908]
Impairment loss
(530,712)
P169,288

1.Patents 200,000
Accumulated Amortization Patents 200,000
ProfFees and Other Legal Expenses 120,000
Patents 120,000
Amortization of Patents 100,000
Accumulated Amortization Patents 100,000
2.Impairment Loss Patents 169,288
Accumulated Amortization Patents 169,288
Problem 17
(a)Gross cost of patents P1,000,000
(b)Carrying value of patents, December 31, 2016 800,000
(c)Amortization of patents for 2017 100,000
(d)Impairment loss on patents 2017 169,288
(e)Amortization of patents for the year 2013 ( 530,712/5 ) 106,142
Problem 17
3. Professional Fees and Other Legal Expenses 70,000
Trademarks 70,000
Amortization of Trademarks(150,000/3) 50,000
Accumulated Amortization-Trademarks 50,000

(f)Total expenses relating to the Trademark (70,000 + 50,000) 120,000

 FaceValue of the note P800,000
PV when issued 200,000 x 3.1699 (633,980)
Problem 17 Initial discount P166,020

4. Discount on Notes Payable 166,020

Franchise 166,020
Retained Earnings 63,398
Interest Expense 49,738
Discount on Notes Payable 113,136
Date PeriodicPayment Interest Principal Bal. of Principal

1/1/16 P633,980

12/31/16 P200,000 P63,398 P136,602 497,378

12/31/17 200,000 49,738 150,262 347,116

 Downpayment 200,000
PV when issued 633,980
Problem 17 Correct cost of franchise 833,980

Recorded amortization 100,000

Correct amortization 833,980/10 (83,398)
Cont. #4 Adjustment 16,602
Franchise 16,602
Retained Earnings 16,602
Franchise 83,398
Accumulated Amortization 83,398
Amortization of Franchise 83,398
Accumulated Amortization Franchise 83,398
Problem 17
(g)Correct cost of the franchise 833,980
(h)Discount on notes payable, 12/31/17 (166,020- 113,136) 52,884
(i)Interest expense for 2017 relating to the Notes Payable 49,738
(j)Carrying value of the Franchise, 12/31/17 (833,980 -166,796) 667,184
Problem 17
5. Retained Earnings 40,000
Organization Costs 40,000

6. Goodwill (285,000/ 19 ) 15,000

Retained Earnings 15,000
Advertising Expense 165,000
Goodwill 165,000
Problem 17
(k)Initial cost of goodwill 285,000 ÷ 19/20 300,000
(l)Goodwill on December 31, 2017 285,000

(l)Net adjustment to Retained Earnings, 1/1/17 71,796 dr.