How much gain on sale is reported for year

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Question 1 - On January 3, 201B, Honest company acquired an item of property, plant and equipment at a cost of P1,000,000. The asset's estimated residual value is P100,000 and estimated useful life of 10 years. The company uses straight-line of depreciation computed to the nearest month. On October 1, 2021, the asset was reclassi?ed as held for sale. Its fair value on this date was P500,000 and the cost to sell was estimated at P20,000. In January 2022, the asset was sold for P500,000 incurring disposal costs of P10,000 on the sale. How much gain on sale is reported for year 2022?

Question 2 - On January 3, 2013, Sweet company bought a patent for P540000. The estimated useful life of the patent is 8 years. During the year 2021, the company determined that the economic life of the patent is only 6 years from the date of acquisition. What is the carrying value of the patent at December 31, 2021?

Reference no: EM133186369

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