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ABC Company acquired an equipment on January 1, 2020 for
P5,000,000.
The estimated useful life of the equipment is five years with no residual
value. A specific price index applicable to the equipment was 150 on
January 1, 2020 and 225 on December 31, 2020. What is the unrealized
holding gain on the equipment to be reported in 2020?
A. 1,250,000
B. 1,500,000
C. 2,000,000
D. 2,500,000

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1. What amount of
2. Whhat amount of deprecitation should be reported in the current cost income statement for 2021?
3. What amount should be reported as realized holding gain on the equipment for 2021?
1. What amount of
2. Whhat amount of deprecitation should be reported in the current cost income statement for 2021?
3. What amount should be reported as realized holding gain on the equipment for 2021?
- ABC Ltd acquired an item of machinery on 1 July 2021 for a cost of $120 000 When the asset was acquired it was considered that the asset would have a useful life to the entity of five years, after which time it would have no residual value It was considered that the pattern of economic benefits would best be reflected by applying the sum-of-digits method Contrary to expectations, on 1 July 2023 the asset was sold for $80 000 Required 1. What was the profit on disposal on 1 July 2023 and what are the journal entries to record the disposal? (Use sum of digit depreciation method) 2. Prepare Depreciation Schedule for the period.arrow_forwardGodoarrow_forwardABC Company acquired an equipment on January 1, 2020 for P5,000,000. Depreciation is computed using the straight-line method. The estimated useful life of the equipment is five years with no residual value. A specific price index applicable to the equipment was 150 on January 1, 2020 and 225 on December 31, 2020. What is the unrealized holding gain on the equipment to be reported in 2020? 1,250,000 1,500,000 2,000,000 2,500,000arrow_forward
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