Johnson Company purchased an equipment at P6,500,000 on January 1, 2020 which will be used for a total of 10 years, no salvage value. Johnson accounted for this equipment using the revaluation model. The value in use of the assets during the three revaluation dates were P5,556,000, P4,413,000 and P4,240,000 on December 31, 2020; 2021; and 2022. While the fair values are P5,500,000, P4,620,000; and P4,770,000; respectively for 2020, 2021 and 2022 with cost to sell of P100,000; P120,000; and P110,000, respectively. How much is the gain on reversal should Johnson Company recognize in its income statement for the year ended December 31, 2022?
Johnson Company purchased an equipment at P6,500,000 on January 1, 2020 which will be used for a total of 10 years, no salvage value. Johnson accounted for this equipment using the revaluation model. The value in use of the assets during the three revaluation dates were P5,556,000, P4,413,000 and P4,240,000 on December 31, 2020; 2021; and 2022. While the fair values are P5,500,000, P4,620,000; and P4,770,000; respectively for 2020, 2021 and 2022 with cost to sell of P100,000; P120,000; and P110,000, respectively. How much is the gain on reversal should Johnson Company recognize in its income statement for the year ended December 31, 2022?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Johnson Company purchased an equipment at P6,500,000 on January 1, 2020 which will be used for a total of 10 years, no salvage value. Johnson accounted for this equipment using the revaluation model. The value in use of the assets during the three revaluation dates were P5,556,000, P4,413,000 and P4,240,000 on December 31, 2020; 2021; and 2022. While the fair values are P5,500,000, P4,620,000; and P4,770,000; respectively for 2020, 2021 and 2022 with cost to sell of P100,000; P120,000; and P110,000, respectively.
How much is the gain on reversal should Johnson Company recognize in its income statement for the year ended December 31, 2022?
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