Burmilla purchased an equipment on January 1, 2020 at a cost of P10,000,000. This equipment was depreciated over its useful life of 10 years with a residual value of 10%. On December 31, 2021, Burmilla determined that the recoverable amount of the equipment was only P5,000,000 with no residual value and appropriately recognized an impairment loss. However on December 31, 2022, the fair value had increased to P7,000,000 and the management of Burmilla deemed to reverse impairment that was previously recorded. What is the gain on impairment to be shown on 2017 income statement? A .
Burmilla purchased an equipment on January 1, 2020 at a cost of P10,000,000. This equipment was depreciated over its useful life of 10 years with a residual value of 10%. On December 31, 2021, Burmilla determined that the recoverable amount of the equipment was only P5,000,000 with no residual value and appropriately recognized an impairment loss. However on December 31, 2022, the fair value had increased to P7,000,000 and the management of Burmilla deemed to reverse impairment that was previously recorded. What is the gain on impairment to be shown on 2017 income statement? A .
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments
Section: Chapter Questions
Problem 6RE
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Burmilla purchased an equipment on January 1, 2020 at a cost of P10,000,000. This equipment was
determined that the recoverable amount of the equipment was only P5,000,000 with no residual value and
appropriately recognized an impairment loss. However on December 31, 2022, the fair value had increased
to P7,000,000 and the management of Burmilla deemed to reverse impairment that was previously
recorded. What is the gain on impairment to be shown on 2017 income statement?
A
.
2,500,000 B. 2,625,000 C. 2,925,000 D. 3,000,000
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