Reference no: EM133008601

Question - A company purchased equipment for P5,000,000 on January 1, 20X8. The equipment had a useful life of five (5) years with no residual value. On December 31, 20X8, the entry classified the equipment as held for sale. On such date, the fair value less cost of disposal of the equipment was P3,500,000 On December 31, 20X9, the entity believed that the criteria for classification as held for sale could no longer be met. Accordingly, the entity decided not to sell the equipment but continue to use it. On December 31, 20X9, the fair value less cost of disposal of the equipment was P2,700,000.

1. What is the carrying amount of the equipment in December 31, 20X8 before it was classifies as held for sale?

2. What amount should be recognized as impairment loss in 20X8?

3. What amount should be included in profit or loss in 20X9 in result of the reclassification on the equipment property, plant and equipment?

4. What is the adjusted carrying amount of the equipment on December 31, 2X20?