On December 31, 2023, the entity believed that the criteria for classification as held for sale can no longer be met. Accordingly, the entity decided not to sell the asset but to continue to use it. On December 31, 2023, the fair value less cost to sell of the equipment is P2,700,000.
On December 31, 2023, the entity believed that the criteria for classification as held for sale can no longer be met. Accordingly, the entity decided not to sell the asset but to continue to use it. On December 31, 2023, the fair value less cost to sell of the equipment is P2,700,000.
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
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 7RE: Bliss Company owns an asset with an estimated life of 15 years and an estimated residual value of...
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Transcribed Image Text:Case 18. Side Step Company purchased an equipment for P5,000,000 on January 1,2022. The equipment has a useful life
of 5 years with no residual value. On December 31, 2022, the entity classified the asset as held for sale. On such date, the
fair value less cost to sell of the equipment is P3,500,000.
On December 31, 2023, the entity believed that the criteria for classification as held for sale can no longer be met.
Accordingly, the entity decided not to sell the asset but to continue to use it. On December 31, 2023, the fair value less
cost to sell of the equipment is P2,700,000.
18. What amount of impairment loss should be recognized in 2022?
a.
500,000
1,000,000
d. 1,500,000
b.
C.
19. What amount should be included in profit or loss in 2023 as a result of the reclassification of the equipment to
property, plant and equipment?
300,000 gain
300,000 loss
800,000 gain
d. 800,000 loss
a.
b.
C.
20. What is the depreciation for 2024?
675,000
b.
a.
875,000
900,000
d. 1,000,000
C.
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