In January 2018, Wine Company purchased equipment at a cost on P2,500,000. The equipment has a residual value of P500,000, a useful life of 8 years and is depreciated by the straight line method. Two years later, it became apparent that this equipment suffered permanent impairment in value. In January 2020, management determined the recoverable amount of the equipment to be only P875,000 with a 2-year remaining useful life and residual value of P125,000.

In January 2018, Wine Company purchased equipment at a cost on P2,500,000. The equipment has a residual value of P500,000, a useful life of 8 years and is depreciated by the straight line method. Two years later, it became apparent that this equipment suffered permanent impairment in value. In January 2020, management determined the recoverable amount of the equipment to be only P875,000 with a 2-year remaining useful life and residual value of P125,000.

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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