On December 31, 20x1, an entity classified a building with an original cost of P20,000,000, carrying amount of P8,000,000 and remaining useful of 8 years as held for sale. The entity uses the straight-line method of depreciation with no residual value for this asset. The fair value of the building on December 31, 20x1 is P7,000,000 while costs to sell are estimated at P200,000. The building is being marketed at a sale price of P7,000,000. On December 31, 20x2, the building remains unsold. The fair value of the building on December 31, 20x2 is P6,800,000 while costs to sell are estimated at P200,000. The entity decreased the sale price to P6,000,000. On December 31, 20x3, the building still remains unsold. The fair value of the machinery on December 31, 20x3 is P8,800,000 while costs to sell are estimated at P200,000. The failure to locate a buyer and complete the sale is beyond the entity’s control. The entity further decreased the sale price to P5,800,000. On December 31. 20x4, the building remains unsold. The fair value of the machinery on December 31, 20x1 is P9,000,000 while costs to sell are estimated at P200,000. The entity did not further decrease the sale price. Requirements: Provide the journal entries.
On December 31, 20x1, an entity classified a building with an original cost of P20,000,000, carrying amount of P8,000,000 and remaining useful of 8 years as held for sale. The entity uses the straight-line method of depreciation
with no residual value for this asset. The fair value of the building on December 31, 20x1 is P7,000,000 while costs to sell are estimated at P200,000. The building is being marketed at a sale price of P7,000,000.
On December 31, 20x2, the building remains unsold. The fair value of the building on December 31, 20x2 is P6,800,000 while costs to sell are estimated at P200,000. The entity decreased the sale price to P6,000,000.
On December 31, 20x3, the building still remains unsold. The fair value of the machinery on December 31, 20x3 is P8,800,000 while costs to sell are estimated at P200,000. The failure to locate a buyer and complete the sale is beyond the entity’s control. The entity further decreased the sale price to P5,800,000.
On December 31. 20x4, the building remains unsold. The fair value of the machinery on December 31, 20x1 is P9,000,000 while costs to sell are estimated at P200,000. The entity did not further decrease the sale price.
Requirements: Provide the
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