(AICP 5 Marjorie, Inc. acquired a machine for P400,000 on August 31, 200. The machine has a five-year life, a P50,000 residual value, and was depreciated using the straight-line method. On May 31, 20x3, a test for recoverability reveals that the present value of expected net future cash inflows related to the continued use and eventual disposal of the machine total P150,000. The machine's fair value less costs of disposal on May 31, 20x3, is P135,000, with no residual value. Assuming a loss on impairment is recognized on May 31, 20x3, what is Marjorie's depreciation expense for June 20x3?

(AICP 5 Marjorie, Inc. acquired a machine for P400,000 on August 31, 200. The machine has a five-year life, a P50,000 residual value, and was depreciated using the straight-line method. On May 31, 20x3, a test for recoverability reveals that the present value of expected net future cash inflows related to the continued use and eventual disposal of the machine total P150,000. The machine's fair value less costs of disposal on May 31, 20x3, is P135,000, with no residual value. Assuming a loss on impairment is recognized on May 31, 20x3, what is Marjorie's depreciation expense for June 20x3?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A machine shop purchased 10 years ago a milling machine for P65,000. A straight-line depreciation reserve had been provided on a 21-year life of the machine. The owner of the machine shop desires to replace the old milling machine with a modern unit of many advantages costing P110,000. It can sell the old unit for P25,000. How much new capital will be required for the purchase? a.Php64,047.619 b.Php80,047.619 c.Php75,047.619 d.Php90,047.619
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D7
A machine shop purchased 10 years ago a milling machine for P65,000. A straight-line depreciation reserve had been provided on a 21-year life of the machine. The owner of the machine shop desires to replace the old milling machine with a modern unit of many advantages costing P110,000. It can sell the old unit for P25,000. How much new capital will be required for the purchase? a.Php 64,047.619 b.Php 75,047.619 c.Php 80,047.619 d.Php 90,047.619
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