On January 2, 2017, RM Company purchased equipment costing P1,500,000. The estimated useful life of the equipment is 8 years with est. residual value of P50,000. The company is using straight-line method of depreciation. On July 1, 2020, RM decided to replace this equipment with a more technologically advance model. Thus, the old equipment will be held for sale. The Fair value less costs to sell of the old equipment as of this date is determined to be P500,000. On December 31, 2020, the fair value less costs to sell of the held for sale equipment amounts to P550,000. On April 1, 2021, RM decided to put back the equipment to operating use. On this date, the equipment’s recoverable value was determined to be P450,000. Determine the following: Entries on July 1, 2020 and December 31, 2020 Entry to record the sale on April 1, 2021
On January 2, 2017, RM Company purchased equipment costing P1,500,000. The estimated useful life of the equipment is 8 years with est. residual value of P50,000. The company is using straight-line method of
On April 1, 2021, RM decided to put back the equipment to operating use. On this date, the equipment’s recoverable value was determined to be P450,000.
Determine the following:
Entries on July 1, 2020 and December 31, 2020
Entry to record the sale on April 1, 2021
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