On December 31, 2021, a machine owned by SLP COMPANY was destroyed by a fire. SLP COMPANY incurred removal and clean-up costs of P40,000. The machine had a book value of P450,000 and a fair value of P510,000 at the time of the fire. The machine was insured “new to old” and was replaced by the insurance company with a new one currently selling at P560,000. The loss due to fire to be reported in the 2021 income statement is
On December 31, 2021, a machine owned by SLP COMPANY was destroyed by a fire. SLP COMPANY incurred removal and clean-up costs of P40,000. The machine had a book value of P450,000 and a fair value of P510,000 at the time of the fire. The machine was insured “new to old” and was replaced by the insurance company with a new one currently selling at P560,000. The loss due to fire to be reported in the 2021 income statement is
Chapter12: Nonrecognition Transactions
Section: Chapter Questions
Problem 29P
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On December 31, 2021, a machine owned by SLP COMPANY was destroyed by a fire. SLP COMPANY incurred removal and clean-up costs of P40,000. The machine had a book value of P450,000 and a fair value of P510,000 at the time of the fire. The machine was insured “new to old” and was replaced by the insurance company with a new one currently selling at P560,000.
The loss due to fire to be reported in the 2021 income statement is
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