Reference no: EM132943019

Questions -

Q1) SABM Co. acquired a machine on January 1, 2018, at a cost of P120,000. It was expected to have a useful economic life of 10 years. SABM Co. uses the straight-line method in depreciating its machinery and equipment and reports on a calendar year basis. On December 31, 2020, the machine was appraised as having a gross replacement cost of P150,000. SABM Co. applies the revaluation model in valuing this class of property, plant, and equipment after its initial recognition. How much should be credited to revaluation surplus on December 31, 2020?

a) P9,000

b) P21,000

c) P30,000

d) P105,000

e) answer not given

Q2) Factor Company's cash generating unit has been assessed for impairment and it has been determined that the unit has incurred an impairment loss of P240,000. The carrying amounts of the assets were as follows: Building P6,000,000; Land P3,500,000; Equipment P2,000,000; Vehicles P2,500,000. The cash generating unit has not recorded goodwill. How much of impairment loss should be allocated to the building?

a) P50,000

b) P62,500

c) P87,500

d) P102,857