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 2020 3. 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 equipment 4. Compute the depreciation of the equipment for 2022 5.Compute the adjusted carrying value of the equipment on December 31, 20
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 2020
3. 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 equipment
4. Compute the
5.Compute the adjusted carrying value of the equipment on December 31, 2022
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