esidual value and will be depreciated using the straight line method. On March 1, 2020 the equipment was reclassified to held for sale under IFRS 5 provisions. On the same date the equipment
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Dvalin Corp had the following transactions related to some of its properties.
- On January 1, 2020, Dvalin acquired equipment for cash at a cost of P6,000,000. The equipment has a life of 6 years with no residual value and will be depreciated using the
straight line method . - On March 1, 2020 the equipment was reclassified to held for sale under IFRS 5 provisions. On the same date the equipment had a fair value less cost to sell of P5,500,000.
- On December 31, 2020 been sold for P3,200,000.
Requirement: Provide the
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- At the beginning of 2019, Conley Company purchased an asset at a cost of 10,000. For financial reporting purposes, the asset has a 4-year life with no residual value and is depreciated by the straight-line method beginning in 2019. For tax purposes, the asset is depreciated under MACRS using a 5-year recovery period. Prior to 2019, Conley had no deferred tax liability or asset. The difference between depreciation for financial reporting purposes and income tax purposes is the only temporary difference between pretax financial income and taxable income. The current income tax rate is 30%, and no change in the tax rate has been enacted for future years. In 2019 and 2020, taxable income will be higher or lower than financial income by what amount?On December 1, 2019, Joy Corporation 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 company undertook all the 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. On December 31, 2019, 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 Joy Corporation had not sold the plant as of December 31, 2020 and the recoverable amount at that date is P315,00, the plant should be carried in Joy's statement of financial position at 31 December 2020 atOn December 1, 2018, Joy Corporation 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 company undertook all the 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. On December 31, 2018, 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. Case 1: Any gain on the subsequent increase in the fair value less cost to sell of a noncurrent asset classified as held for sale should be treated as follows: a. The gain should be recognized in full. b. The gain should not be recognized. c. The gain should…
- Affable Company purchased an equipment for P5,000,000 on January 1, 2020. The equipment had a useful life of 5 years with no residual value. On December 31, 2020, the entity classified the equipment as held for sale. On such a date, the fair value less cost of disposal of the equipment was P 3,500,000. On December 31, 2021, the entity believed that the criteria for classification as held for sale can no longer be met. Accordingly, the entity decided not to sell the equipment but to continue to use it. On December 31, 2021, the fair value less cost of disposal of the equipment was P2,700,000 Required:1. Compute the carrying value of the equipment on December 31, 2020 before reclassification as held for sale.2. Compute the amount of impairment loss in 20203. Compute the amount to be included in profit or loss in 2021 as a result of the reclassification of the equipment to property, plant and equipment4. Compute the depreciation of the equipment for 20225.Compute the adjusted carrying…Asap Cullumber Company owns delivery equipment that cost $53,800 and has accumulated depreciation of $27,300 as of July 30, 2020. On that date, Cullumber disposes of this equipment. For parts b - d below, enter D for debit or C for credit in the first box and the amount in the second box. What is the net book value of the equipment on July 30, 2020? Assume Cullumber scraps the equipment as having no value on July 30. What is the gain or loss, if any, that Cullumber should recognize? Assume Cullumber sells the equipment for $37,200 cash on July 30. What is the gain or loss, if any, that Cullumber should recognize? Assume Cullumber sells the equipment for $18,000 cash on July 30. What is the gain or loss, if any, that Cullumber should recognize?Jasmin Company purchased an investment property on January 1, 2017 at a cost of P2,200,000. The property has a useful life of 40 years and at December 31, 2019 had a fair value of P3,000,000. On January 1, 2020, the property was sold for net proceeds of P2,900,000. The fair value of the investment property cannot be measured reliably. What is the gain or loss to be recognized in profit or loss for the year ended December 31, 2020 regarding the disposal of the property?
- ccCullumber Company owns delivery equipment that cost $53,800 and has accumulated depreciation of $27,300 as of July 30, 2020. On that date, Cullumber disposes of this equipment. For parts b - d below, enter D for debit or C for credit in the first box and the amount in the second box. What is the net book value of the equipment on July 30, 2020? Assume Cullumber scraps the equipment as having no value on July 30. What is the gain or loss, if any, that Cullumber should recognize? Assume Cullumber sells the equipment for $37,200 cash on July 30. What is the gain or loss, if any, that Cullumber should recognize? Assume Cullumber sells the equipment for $18,000 cash on July 30. What is the gain or loss, if any, that Cullumber should recognize?An equipment was purchased by BB Company on January 1, 2019 for P5,000,000 with estimated useful life of 10 years and no salvage value. On January 1, 2021, the entity classified the asset as held for sale in accordance with PFRS 5. As of this date the fair value of the asset is P3,300,000 and cost to sell is P100,000. As of December 31, 2021. the entity believes that the criteria for classification as held for sale can no longer be met. The fair value of the equipment is P3,800,000 and cost to sell is P200,000 as of December 31, 2021 while the value in use amounted to 3,200,000. At what amount should the asset be reported in its 2021 statement of financial position?of Adam, Inc. purchased equipment in 2021 at a cost of $600,000. Two years later it became apparent to Adam, Inc. that this equipment had suffered an impairment of value. In early 2023, the book value of the asset was $510,000 and it is estimated that the fair value or market value is now $465,000. The entry to record the impairment is... a. No entry is necessary as p write-off violates the historical cost principle b. Debit Accumulated depreciation 90,000 and credit Reserve for Loss on Impairment of Equipment 90,000 O c. Debit Loss on Impairment of Equipment 70,000 and credit Accumulated Depreciation-Equipment 70,000 O d. Debit Loss on impairment of Equipment 45,000 and credit Accumulated Depreciation-Equipment 45,000
- Thousand Company classified an equipment as held for sale on January 1, 2021. On this date the equipment has a carrying value of 5 million and the related accumulated depreciation is 1.2 million. The equipment has a fair value less cost to sell of 4.8 million on the date of reclassification. On December 31, 2021, the equipment remained unsold but it still meets the criteria to be classified as held for sale. Its fair value less cost to sell on this date was 4.9 million. On December 31, 2022, the equipment is still unsold but the criteria to be classified as held for sale are still met. Its fair value on this date was 5,050,000. On December 31, 2023, the equipment is still unsold but the criteria to be classified as held for sale are still met. Its fair value on this date was 4.6 million. On December 31, 2024, the company abandoned its original plan to sell the asset. Its fair value less cost to sell on this date was 4.4 million. If the equipment were not classified as held for sale,…Thousand Company classified an equipment as held for sale on January 1, 2021. On this date the equipment has a carrying value of 5 million and the related accumulated depreciation is 1.2 million. The equipment has a fair value less cost to sell of 4.8 million on the date of reclassification. On December 31, 2021, the equipment remained unsold but it still meets the criteria to be classified as held for sale. Its fair value less cost to sell on this date was 4.9 million. On December 31, 2022, the equipment is still unsold but the criteria to be classified as held for sale are still met. Its fair value on this date was 5,050,000. On December 31, 2023, the equipment is still unsold but the criteria to be classified as held for sale are still met. Its fair value on this date was 4.6 million. On December 31, 2024, the company abandoned its original plan to sell the asset. Its fair value less cost to sell on this date was 4.4 million. If the equipment were not classified as held for sale,…Amiable Company purchased an equipment for P5,000,000 on January 1, 2020. The equipment had a useful life of 5 years with no residual value. On December 31, 2020, the entity 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, 2021, the entity believed that the criteria for classification as held for sale can no longer be met. Accordingly, the entity decided not to sell the equipment but to continue to use it. On December 31, 2021, the fair value less cost of disposal of the equipment was P2,700,000. requirement What is the carrying amount of the equipment on December 31, 2020 before classification as held for sale? What is the adjusted carrying amount of the equipment on December 31, 2022?
