On December 31, 2019, Human subjected to impairment test a piece of equipment. Data pertinent to the equipment as of December 31, 2019 follows: Original cost 2,400,000 Adjusted Accumulated depreciation 600,000 Selling price 1,400,000 Estimated cost to make the sale 200,000 Value in use 1,100,000 Remaining useful life 6 years Method of depreciation Straight line On December 31, 2021, the asset is found to have a recoverable amount of P1,300,000. QUESTIONS:Based on the information above and your analysis, answer the following: 1) How much loss impairment is recognized in 2019? A. 400,000 C. 600,000 B. 500,000 D. 700,000 2) How much is the depreciation expense recognized in 2020? A. 200,000 C. 300,000 B. 216,667 D. 333,333 3) How much gain on recovery is recognized in 2021? A. 500,000 C. 300,000 B. 400,000 D. 200,000
On December 31, 2019, Human subjected to impairment test a piece of equipment. Data pertinent to the
equipment as of December 31, 2019 follows:
Original cost 2,400,000
Adjusted
depreciation
600,000
Selling price 1,400,000
Estimated cost to make the sale 200,000
Value in use 1,100,000
Remaining useful life 6 years
Method of depreciation Straight line
On December 31, 2021, the asset is found to have a recoverable amount of P1,300,000.
QUESTIONS:Based on the information above and your analysis, answer the following:
1) How much loss impairment is recognized in 2019?
A. 400,000 C. 600,000
B. 500,000 D. 700,000
2) How much is the depreciation expense recognized in 2020?
A. 200,000 C. 300,000
B. 216,667 D. 333,333
3) How much gain on recovery is recognized in 2021?
A. 500,000 C. 300,000
B. 400,000 D. 200,000
4) How much much is the depreciation expense recognized in 2022 under the cost model?
A. 325,000 C. 250,000
B. 300,000 D. 200,000
5) How much is the depreciation expense recognized in 2022 under the revaluation model?
A. 325,000 C. 250,000
B. 300,000 D. 200,000
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