Jayanne Co. acquired an equipment for P4,200,000 in 2017. The policy is straight line depreciation, full depreciation in the year of acquisition and no depreciation in the year of disposal. The useful life is five years with residual value of P200,000. On July 1, 2020, the equipment was sold for P2,500,000. What is the gain on disposal in 2020? A. 700,000 B. 820,000 C. 500,000 D. 400,000

Jayanne Co. acquired an equipment for P4,200,000 in 2017. The policy is straight line depreciation, full depreciation in the year of acquisition and no depreciation in the year of disposal. The useful life is five years with residual value of P200,000. On July 1, 2020, the equipment was sold for P2,500,000. What is the gain on disposal in 2020? A. 700,000 B. 820,000 C. 500,000 D. 400,000

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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Question

Jayanne Co. acquired an equipment for P4,200,000 in 2017. The policy is straight line depreciation, full
depreciation in the year of acquisition and no depreciation in the year of disposal. The useful life is five years
with residual value of P200,000. On July 1, 2020, the equipment was sold for P2,500,000. What is the gain
on disposal in 2020?
A. 700,000
B. 820,000
C. 500,000
D. 400,000

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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