Reference no: EM133146517
Questions -
Q1. On January 1, 2017, Jungkook Company purchased an equipment for P1,970,000. On this date, the equipment has an estimated economic useful life of 12 years and estimated residual value of P98,000. It is the company's policy to depreciate this type of equipment using a sum-of-years digit. On January 1, 2021, Jungkook Company made a review of the estimated useful life and salvage value of the equipment and review revealed that the asset has a revised total life of 14 years and a residual value of P100,000. The company also changed the method of depreciation to straight-line. What is the carrying value of the asset of December 31, 2022?
a. P789,600
b. P875,800
c. P769,600
d. P865,800
Q2. TGIF Company owned a building on January 01, 2019, with historical cost of P52,000,000. The property is depreciated over 40 years on a straight-line basis with no residual value. The entity adopted a policy of revaluation of property. The building had so far been revalued twice at fair value. The fair values of the building are as follows: January 01, 2020 - P60,840,000; January 01, 2022 - P72,150,000.
How much is the revaluation surplus to be reported in the statement of changes in equity for the year ended December 31, 2022?
a. P23,400,000
b. P24,050,000
c. P23,660,000
d. P24,570,000
Q3. YOU CAN DO IT Corporation has equipment with a carrying value of 450,000 on December 31, 2021. The following information was available on December 31, 2021:
Expected net cash flows (undiscounted)- P420,000
Expected net cash flows discounted at 7%- P400,000
Fair value, using the assets with other assets- P415,000
Fair value, assuming the assets are sold stand-alone- P428,000
What is the impairment loss that the Company must report in its 2021 income statement for this equipment?
a. P35,000
b. P22,000
c. P30,000
d. P50,000
Q4. On January 1, 2019, Tarlac Company acquired a machine for P4,500,000. The machine has a useful life of 10 years with no salvage value. Tarlac is using the revaluation model.
On January 1, 2021, the machine was revalued at P5,200,000. The accumulated depreciation to be reported for this machine at December 31, 2022 would be: No choices.