MABC Company reported an impairment loss of P2,000,000 in 2020. This loss was related to an item of property, plant and equipment which was acquired on January 1, 2019 with cost of P10,000,000, useful life of 10 years and no residual value. On December 31, 2021, the entity determined that the fair value of the impaired asset had increased to P6,850,000. The straight line method is used in recording depreciation and uses cost model to account its property, plant and equipment. What amount of gain on reversal of impairment should be reported in the income statement for 2021?
MABC Company reported an impairment loss of P2,000,000 in 2020. This loss was related to an item of property, plant and equipment which was acquired on January 1, 2019 with cost of P10,000,000, useful life of 10 years and no residual value. On December 31, 2021, the entity determined that the fair value of the impaired asset had increased to P6,850,000. The straight line method is used in recording depreciation and uses cost model to account its property, plant and equipment. What amount of gain on reversal of impairment should be reported in the income statement for 2021?
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
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 8MC: On July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was...
Related questions
Question
MABC Company reported an impairment loss of P2,000,000 in 2020. This loss was related to an item of property, plant and equipment which was acquired on January 1, 2019 with cost of P10,000,000, useful life of 10 years and no residual value. On December 31, 2021, the entity determined that the fair value of the impaired asset had increased to P6,850,000. The
What amount of gain on reversal of impairment should be reported in the income statement for 2021?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College