Reference no: EM133185939

Question 1 - On July 16, 2020, Agony Company classified a noncurrent asset as held for sale in accordance with IFRS 5 Noncurrent Assets Held for Sale and Discontinued Operations. At that date, the asset's carrying amount was P45,000, Its fair value was estimated at P33,000 and the costs to sell at P4,500.

On October 20, 2020, the asset was sold for net proceeds of P27,600.

If Agony Company accounts for noncurrent assets using the cost model what amount should be included as impairment loss and loss on disposal, respectively, in Agony Company's statement of comprehensive income for the year ended December 31, 2020?

a. P16,500 and P17,400

b. P0 and P17,400

c. P12,000 and P5,400

d. P16,500 and P900

Question 2 - On January 1, 2018, an entity acquired an item of property, plant and equipment at a cost of P100,000. The asset had an estimated residual value of P10,000 and a useful life cf 10 years. The company uses straight-line method of depreciation, computed to the nearest month.

On October 1, 2021, the asset was reclassified as "held of sale" under the strict criteria of IFRS 5 Noncurrent Assets Held for Sate and Discontinued Operations. Its fair value on this date was P50,000 and the cost to sell was estimated at P2,000. These estimates were considered valid on December 31, 2021. In January, 2022, the asset was sold for P50,000 and disposal costs incurred amounted to P3,000.

How much is the impairment loss reported in profit or loss for the year 2021?

a. P19,250

b. P19,250

c. P18,250

d. P8,250