Reference no: EM132999057
On Jan. 1, 2020, BTS Co. acquired a unit of equipment for a total cost of P15,000,000. The entity estimates that during its 10-year useful life, the equipment will be able to produce 1,500,000 units of its product for 30,000 working hours, and will be sold for scrap.
The usage of the equipment from 2020 to 2023 is as follows:
Units Produced Hours Used
2020 60,000 2,400
2021 28,000 1,500
2022 40,000 2,700
2023 60,000 4,500
Problem 1: On Jan. 1, 2024, the equipment was sold for P12,000,000. How much is the gain on sale on Jan. 1, 2024 assuming that BTS opted to use the working hours depreciation method?
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