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?
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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
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?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education