In January 1, 2020, the following assets of Company A had the following corresponding values:Carrying amountEUL Sound Value Year acquired5,400,0005,750,000*7.600.0007,850,000MachineryEquipmentO 3.122.600O 3.050.000Ⓒ 2.988.000Residual Value3.837.500500,000400,0001012The company decided to measure these properties using revaluation model.Full year depreciation is taken on the year of purchase.In January 1, 2022, the replacement cost of equipment was revalued at P5.100.000.What is the amount taken to profit or loss as a result of the revaluation on January 1. 2022?20172016

Name: In January 1, 2020, the following assets of Company A had the followi
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Description: In January 1, 2020, the following assets of Company A had the following corresponding values:Carrying amountEUL Sound Value Year acquired5,400,0005,750,000*7.600.0007,850,000MachineryEquipmentO 3.122.600O 3.050.000Ⓒ 2.988.000Residual Value3.837.5005

he question involves the revaluation of machinery and equipment by Company A, which has decided to…

Business

Accounting

In January 1, 2020, the following assets of Company A had the following corresponding values: Carrying amount Residual Value EUL Sound Value Year acquired 5,400,000 10 5,750,000 7,600,000 12 *7,850,000 Machinery Equipment O 3.122.600 The company decided to measure these properties using revaluation model. Full year depreciation is taken on the year of purchase. In January 1, 2022. the replacement cost of equipment was revalued at P5,100.000. What is the amount taken to profit or loss as a result of the revaluation on January 1, 2022? Ⓒ 3.050.000 O2.988.000 500,000 400,000 3.837.500 2017 2016

In January 1, 2020, the following assets of Company A had the following corresponding values: Carrying amount Residual Value EUL Sound Value Year acquired 5,400,000 10 5,750,000 7,600,000 12 *7,850,000 Machinery Equipment O 3.122.600 The company decided to measure these properties using revaluation model. Full year depreciation is taken on the year of purchase. In January 1, 2022. the replacement cost of equipment was revalued at P5,100.000. What is the amount taken to profit or loss as a result of the revaluation on January 1, 2022? Ⓒ 3.050.000 O2.988.000 500,000 400,000 3.837.500 2017 2016

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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Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

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Question

In January 1, 2020, the following assets of Company A had the following corresponding values:
Carrying amount
EUL Sound Value Year acquired
5,400,000
5,750,000
*7.600.000
7,850,000
Machinery
Equipment
O 3.122.600
O 3.050.000
Ⓒ 2.988.000
Residual Value
3.837.500
500,000
400,000
10
12
The company decided to measure these properties using revaluation model.
Full year depreciation is taken on the year of purchase.
In January 1, 2022, the replacement cost of equipment was revalued at P5.100.000.
What is the amount taken to profit or loss as a result of the revaluation on January 1. 2022?
2017
2016

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