Reference no: EM132718568

On December 31, 2020, Mass Control Company classified as held for sale an equipment with a carrying amount of P5,000,000. On this date, the equipment is expected to be sold for P4,600,000. Reasonable disposal cost to be incurred on sale is expected at P200,000.

• By December 31, 2021, the equipment had not been sold and management decided to place back the equipment to operations. On same date, the entity estimated that the equipment is expected to be sold at P4,300,000 with disposal cost of P50,000.
• The carrying amount of the equipment is P4,000,000 on December 31, 2021 if the noncurrent asset is not classified as held for sale.

Problem 1: What is the impairment loss in 2020?

Problem 2: What is the measurement of equipment on December 31, 2021?

Problem 3: What amount should be recognized in profit or loss as a result of reclassification in 2021? (use negative sign if loss)