Reference no: EM132945254

Questions -

Q1. On July 1, 2019, an entity purchased the rights to a mine for P20,000,000, of which P2,000,000 was allocable to the land. Estimated reserves were 1,500,000 tons. The entity expected to extract and sell 25,000 tons per month.

The entity purchased mining equipment on July 1, 2019 for P8,000,000. The mining equipment had a useful life 8 years. However, after all the resource is removed, the equipment will be of no use and will be sold for P500,000. What is the carrying amount of the mineral property on December 31, 2019?

Q2. On January 1, 2019, an entity acquired an equipment with useful life of 8-vears and residual value of P300,000. The depreciation applicable to this equipment was P900,000 for 2020 using the double declining balance method. What was the acquisition cost of the equipment?

Q3. On January l, 2019, an entity purchased a large quantity of personal computers. The cost of these computers was P6,000,000. On the date of purchase, the management estimated that the computers would last approximately 4 years and would have a residual value at that time of P600,000. The entity used the double declining balance method.

During January 2020, the management realized that technological advancements had made the computers virtually obsolete and that they would have to be replaced. The residual value did not change. Management proposed changing the remaining useful life of the computers to 2 years. What is the depreciation expense for 2020?

Q4. Cream Company had a machinery costing P3,000,000 when purchased on January 2, 2009. Estimated useful life of the asset was for 2 years with no salvage value at the end of its usefu1 life. Cream uses the straight line method of depreciation. On January 2, 2014, Cream is evaluating the machinery for possible impairment. The machinery has a remaining useful life of 5 years and is expected to generate cash inflows of P500,000 per year and the company also expects to realize P200,000 from sale on the eventual disposal at the end of the fifth year. Cream has determined that the rate implicit in current market transaction for similar asset is 10% Available information as of January 2. 2014 also showed that the appropriate market price for the same asset is P2,000,000. Estimated cost of disposal, P150,000. What amount of impairment loss, if any, is to be recognized?

Q5. On January 1, 2021, Irene's Corporation bought a factory equipment for P924,000 salvage value was estimated at P24,000. The asset will be depreciated over 10 years using the double declining balance method. How much is the total accumulated depreciation to be reported in the balance sheet on December 2021.