An entity accounted for noncurrent assets using the cost model. On July 1, 2019, the entity classified an equipment as held for sale. At the date, the carrying amount was P5,000,000, the fair value was estimated at P3,500,000 and the cost of disposal at P100,000. On December 31, 2019, the equipment was sold for net proceeds of P2,500,000. What amount should be reported as an impairment loss for 2019? a. 1,600,000 b. 2,500,000 c. 1,500,000 d. 900,000 2. What amount should be reported as loss on disposal for 2019? a. 1,500,000 b. 2,500,000 c. 1,600,000 d. 900,000
An entity accounted for noncurrent assets using the cost model. On July 1, 2019, the entity classified an equipment as held for sale. At the date, the carrying amount was P5,000,000, the fair value was estimated at P3,500,000 and the cost of disposal at P100,000. On December 31, 2019, the equipment was sold for net proceeds of P2,500,000. What amount should be reported as an impairment loss for 2019? a. 1,600,000 b. 2,500,000 c. 1,500,000 d. 900,000 2. What amount should be reported as loss on disposal for 2019? a. 1,500,000 b. 2,500,000 c. 1,600,000 d. 900,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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An entity accounted for noncurrent assets using the cost model. On July 1, 2019, the entity classified an equipment as held for sale. At the date, the carrying amount was P5,000,000, the fair value was estimated at P3,500,000 and the cost of disposal at P100,000. On December 31, 2019, the equipment was sold for net proceeds of P2,500,000.
- What amount should be reported as an impairment loss for 2019?
a. 1,600,000
b. 2,500,000
c. 1,500,000
d. 900,000
2. What amount should be reported as loss on disposal for 2019?
a. 1,500,000
b. 2,500,000
c. 1,600,000
d. 900,000
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