On Jan. 1, 2020, Evan Co. acquired a unit of equipment for a total cost of P15,000,000. The entity estimates that during its 10-year useful life, the equipment will be able to produce 1,500,000 units of its product for 30,000 working hours, and will be sold for scrap. The usage of the equipment from 2020 to 2023 is as follows: Units Produced Hours Used 2020 60,000 2,400 2021 28,000 1,500 2022 40,000 2,700 2023 60,000 4,500 On Jan. 1, 2024, the equipment was sold for P12,000,000. How much is the gain on sale on Jan. 1, 2024 assuming that Evan opted to use the working hours depreciation method?
On Jan. 1, 2020, Evan Co. acquired a unit of equipment for a total cost of P15,000,000. The entity estimates that during its 10-year useful life, the equipment will be able to produce 1,500,000 units of its product for 30,000 working hours, and will be sold for scrap. The usage of the equipment from 2020 to 2023 is as follows: Units Produced Hours Used 2020 60,000 2,400 2021 28,000 1,500 2022 40,000 2,700 2023 60,000 4,500 On Jan. 1, 2024, the equipment was sold for P12,000,000. How much is the gain on sale on Jan. 1, 2024 assuming that Evan opted to use the working hours depreciation method?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On Jan. 1, 2020, Evan Co. acquired a unit of equipment for a total cost of P15,000,000. The entity estimates that during its 10-year useful life, the equipment will be able to produce 1,500,000 units of its product for 30,000 working hours, and will be sold for scrap.
The usage of the equipment from 2020 to 2023 is as follows:
|
|
Units Produced |
Hours Used |
|
2020 |
60,000 |
2,400 |
|
2021 |
28,000 |
1,500 |
|
2022 |
40,000 |
2,700 |
|
2023 |
60,000 |
4,500 |
On Jan. 1, 2024, the equipment was sold for P12,000,000. How much is the gain on sale on Jan. 1, 2024 assuming that Evan opted to use the working hours
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