CDO Corporation determined to sell a group of assets within its shoe manufacturing division, as it believed it was cheaper to buy the parts from China. The assets that it wanted to sell had the following carrying amounts: Factory P 22,000,000 Accumulated depreciation (12,000,000) Raw materials 3,800,000 Spare parts The management of CDO calculated the fair value less costs to sell of the disposal group to be P14.400,000. The assets were sold on February 15, 2020 for P15,400,000, with selling costs amounting to P700,000. Before income taxes, how much should be recognized as gain (loss) on sale of the disposal group?
CDO Corporation determined to sell a group of assets within its shoe manufacturing division, as it believed it was cheaper to buy the parts from China. The assets that it wanted to sell had the following carrying amounts: Factory P 22,000,000 Accumulated depreciation (12,000,000) Raw materials 3,800,000 Spare parts The management of CDO calculated the fair value less costs to sell of the disposal group to be P14.400,000. The assets were sold on February 15, 2020 for P15,400,000, with selling costs amounting to P700,000. Before income taxes, how much should be recognized as gain (loss) on sale of the disposal group?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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CDO Corporation determined to sell a group of assets within its shoe manufacturing division, as it believed it was cheaper to buy the parts from China. The assets that it wanted to sell had the following carrying amounts:
Factory
P 22,000,000
(12,000,000)
Raw materials
3,800,000
Spare parts
The management of CDO calculated the fair value less costs to sell of the disposal group to be P14.400,000. The assets were sold on February 15, 2020 for P15,400,000, with selling costs amounting to P700,000.
Before income taxes, how much should be recognized as gain (loss) on sale of the disposal group?
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