Norraine Company used the composite method of depreciation based on a composite rate of 25%. At the beginning of 2020, the total cost of equipment was P5,000,000 with a total residual value of P600,000. The accumulated depreciation was P3,000,000 at that time. In January 2020, the entity purchased an equipment for P2,500,000 with no residual value. At the end of 2020, the entity sold an equipment with an original cost of P1,000,000 and a residual value of P200,000 for P350,000. This asset was acquired on January 1, 2018. 1. What is the depreciation for 2020? a. 1,625,000 b. 1,875,000 c. 1,125,000 d. 975,000 2. What is the gain or loss from the derecognition of the asset on December 31, 2020? 100,000 gain b. 150,000 loss 50,000 loss d. а. с.

Norraine Company used the composite method of depreciation based on a composite rate of 25%. At the beginning of 2020, the total cost of equipment was P5,000,000 with a total residual value of P600,000. The accumulated depreciation was P3,000,000 at that time. In January 2020, the entity purchased an equipment for P2,500,000 with no residual value. At the end of 2020, the entity sold an equipment with an original cost of P1,000,000 and a residual value of P200,000 for P350,000. This asset was acquired on January 1, 2018. 1. What is the depreciation for 2020? a. 1,625,000 b. 1,875,000 c. 1,125,000 d. 975,000 2. What is the gain or loss from the derecognition of the asset on December 31, 2020? 100,000 gain b. 150,000 loss 50,000 loss d. а. с.

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter9: Long-term Assets: Fixed And Intangible

Section: Chapter Questions

Problem 9.17EX: Entries for sale of fixed asset Equipment acquired on January 8 at a cost of 168,000 has an...

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