Impairment and Revaluation of PPE On January 1, 2016, Jude Co. acquired machinery with a cost of P2,300,000 with an estimated useful life of 10 years and an estimated salvage value of P200,000. On January 1, 2017, based on the objective, the machinery was found to have been impaired. The machinery has a recoverable amount (fair value) of P1,850,000 with an estimated useful residual value of P50,000. On January 1, 2019, the machinery now has a recoverable amount (fair value) of P1,499,400 with no residual value. Assuming the company is using a revaluation model, answer the following: How much is the depreciation expense in 2016? How much is the impairment loss in 2017? How much is the depreciation expense in 2017?
Impairment and Revaluation of PPE On January 1, 2016, Jude Co. acquired machinery with a cost of P2,300,000 with an estimated useful life of 10 years and an estimated salvage value of P200,000. On January 1, 2017, based on the objective, the machinery was found to have been impaired. The machinery has a recoverable amount (fair value) of P1,850,000 with an estimated useful residual value of P50,000. On January 1, 2019, the machinery now has a recoverable amount (fair value) of P1,499,400 with no residual value. Assuming the company is using a revaluation model, answer the following: How much is the depreciation expense in 2016? How much is the impairment loss in 2017? How much is the depreciation expense in 2017?
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles
Section: Chapter Questions
Problem 8.5E: Change in Estimate Assume that Bloomer Company purchased a new machine on January 1, 2016, for...
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Impairment and Revaluation of PPE
On January 1, 2016, Jude Co. acquired machinery with a cost of P2,300,000 with an estimated useful life of 10 years and an estimated salvage value of P200,000. On January 1, 2017, based on the objective, the machinery was found to have been impaired. The machinery has a recoverable amount (fair value) of P1,850,000 with an estimated useful residual value of P50,000.
On January 1, 2019, the machinery now has a recoverable amount (fair value) of P1,499,400 with no residual value.
Assuming the company is using a revaluation model, answer the following:
- How much is the
depreciation expense in 2016? - How much is the impairment loss in 2017?
- How much is the depreciation expense in 2017?
- How much is the revaluation surplus on January 1, 2019?
- How much is the depreciation expense in 2019?
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