On December 31, 2026, MATAPAT Company classified as held for sale an equipment with a carrying amount of P5,000,000. On this date, the equipment is expected to be sold for P4,600,000. Reasonable disposal cost to be incurred on sale is expected at P200,000. By December 31, 2027, the equipment had not been sold and management decided to place back the equipment to operations. On same date, the entity estimated that the equipment is expected to be sold at P4,300,000 with disposal cost of P50,000. The carrying amount of the equipment is P4,000,000 on December 31, 2027 if the noncurrent asset is not classified as held for sale. What is the impairment loss in 2026? and What amount should be recognized in profit or loss as a result of reclassification in 2027?
On December 31, 2026, MATAPAT Company classified as held for sale an equipment with a carrying amount of P5,000,000. On this date, the equipment is expected to be sold for P4,600,000. Reasonable disposal cost to be incurred on sale is expected at P200,000. By December 31, 2027, the equipment had not been sold and management decided to place back the equipment to operations. On same date, the entity estimated that the equipment is expected to be sold at P4,300,000 with disposal cost of P50,000. The carrying amount of the equipment is P4,000,000 on December 31, 2027 if the noncurrent asset is not classified as held for sale. What is the impairment loss in 2026? and What amount should be recognized in profit or loss as a result of reclassification in 2027?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
On December 31, 2026, MATAPAT Company classified as held for sale an equipment with a carrying amount of P5,000,000. On this date, the equipment is expected to be sold for P4,600,000. Reasonable disposal cost to be incurred on sale is expected at P200,000.
By December 31, 2027, the equipment had not been sold and management decided to place back the equipment to operations. On same date, the entity estimated that the equipment is expected to be sold at P4,300,000 with disposal cost of P50,000.
The carrying amount of the equipment is P4,000,000 on December 31, 2027 if the noncurrent asset is not classified as held for sale.
- What is the impairment loss in 2026? and What amount should be recognized in profit or loss as a result of reclassification in 2027?
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education