Reference no: EM132772441

On December 31, 2016, Karlo subjected to impairment test a piece of equipment, Data pertinent to the equipment as of December 31, 2016 follow: Original Cost 2,400,000 Adjusted accumulated depreciation 600,000 Selling price 1,400,000 Estimated cost to make the sale 200,000 Value In use 1,100,000 Remaining useful life 6 years Method of depreciation Straight line. On December 31, 2018, the asset is found to have a fair market value of P1,300,000

Problem 1: How much loss on impairment is recognized in 2016?

a. 400,000

b. 600,000

c. 500,000

d. 700,000

Problem 2: How much is the depreciation expense recognized in 2017?

a. 200,000

b. 300,000

c. 216,667

d. 333,333

Problem 3: how much is the gain on recovery is recognized in 2018?

a. 500,000

b. 300,000

c. 400,000

d. 200,000