Reference no: EM132939252

Questions -

Q1) On December 1, 2021, Blue Corp. decided to dispose of an item of plant that is carried in its records at a cost of P450,000, with accumulated depreciation of P80,000. Depreciation on the plant since it was originally acquired has been charged at P5,000 per month. The plant will continue to be operated until it is sold, at which time the operations of the plant will be outsourced. The company undertook all necessary actions to be able to classify the asset as held for sale. It is estimated that it could sell the plant for its fair value, P350,000, incurring P10,000 selling costs in the process. The plant has been depreciated at an amount of P5,000 per month.

On December 31, 2021, the plant had not been sold but, due to a shortage of this type of plant, there had been an increase in the fair value to P360,000 while expected costs to sell remain at P10,000.

If Blue Corp. had not sold the plant as of December 31, 2022 and the recoverable amount at that date is P315,000, the plant should be carried in Blue's statement of financial position at 31 December 2022 at?

Q2) In November 01, 2020, Black Corp. invested in P600,000 in equity securities representing 20,000 ordinary shares of Green Company. The investment is classified as EQUITY INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS since the company intends to sell the security for a short-term profit. On December 31, 2020, this investment has a market value of P580,000. On January 15, 2020, Black Corp. sold the investment for P630,000. What amount of realized gain should Black Corp. recognize on the disposal of the investments?