During the current year an entity sold a piece of equipment used in production. The equipment had been accounted for using the revaluation method and details of the accounts and sale are presented below: Sales price P100,000 Equipment carrying amount (net) 90,000 Revaluation surplus 20,000 Which of the following is correct regarding recording the sale? Group of answer choices The gain that should be recorded in other comprehensive income is P10,000 The gain that should be recorded in profit and loss is P10,000; the P20,000 revaluation surplus may be transferred to retained earnings. The gain that should be recorded in other comprehensive income is P30,000 The gain that should be recorded in profit and loss is P30,000
During the current year an entity sold a piece of equipment used in production. The equipment had been accounted for using the revaluation method and details of the accounts and sale are presented below: Sales price P100,000 Equipment carrying amount (net) 90,000 Revaluation surplus 20,000 Which of the following is correct regarding recording the sale? Group of answer choices The gain that should be recorded in other comprehensive income is P10,000 The gain that should be recorded in profit and loss is P10,000; the P20,000 revaluation surplus may be transferred to retained earnings. The gain that should be recorded in other comprehensive income is P30,000 The gain that should be recorded in profit and loss is P30,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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During the current year an entity sold a piece of equipment used in production. The equipment had been accounted for using the revaluation method and details of the accounts and sale are presented below:
|
Sales price |
P100,000 |
|
Equipment carrying amount (net) |
90,000 |
|
Revaluation surplus |
20,000 |
Which of the following is correct regarding recording the sale?
Group of answer choices
The gain that should be recorded in other comprehensive income is P10,000
The gain that should be recorded in profit and loss is P10,000; the P20,000 revaluation surplus may be transferred to retained earnings .
The gain that should be recorded in other comprehensive income is P30,000
The gain that should be recorded in profit and loss is P30,000
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