On December 31, 2020, Patriarch, Inc. determined to sell a group of assets within its meat processing plant, as it believed a newly introduced set of machineries would be more economical for the company. The assets that it wanted to sell had the following carrying amounts: Machinery 2,200,000 Accumulated depreciation 1,200,000 Machinery tools 380,000 Machinery parts 220,000 The management of Patriarch, Inc. calculated the fair value (based on active market for similar assets) less cost to sell of the disposal group to be P1,400,000. The assets were sold on March 17, 2021 for P1,520,000. Selling costs of P60,000 were paid. Required: Prepare the entries on December 31, 2020.
On December 31, 2020, Patriarch, Inc. determined to sell a group of assets within its meat processing plant, as it believed a newly introduced set of machineries would be more economical for the company. The assets that it wanted to sell had the following carrying amounts: Machinery 2,200,000 Accumulated depreciation 1,200,000 Machinery tools 380,000 Machinery parts 220,000 The management of Patriarch, Inc. calculated the fair value (based on active market for similar assets) less cost to sell of the disposal group to be P1,400,000. The assets were sold on March 17, 2021 for P1,520,000. Selling costs of P60,000 were paid. Required: Prepare the entries on December 31, 2020.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On December 31, 2020, Patriarch, Inc. determined to sell a group of assets within its meat processing plant, as it believed a newly introduced set of machineries would be more economical for the company. The assets that it wanted to sell had the following carrying amounts:
|
Machinery |
2,200,000 |
|
|
1,200,000 |
|
Machinery tools |
380,000 |
|
Machinery parts |
220,000 |
The management of Patriarch, Inc. calculated the fair value (based on active market for similar assets) less cost to sell of the disposal group to be P1,400,000.
The assets were sold on March 17, 2021 for P1,520,000. Selling costs of P60,000 were paid.
Required:
- Prepare the entries on December 31, 2020.
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