On January 1, 2001, MM Inc. constructed a building classified as owner occupied property at a cost of P3,000,000 with no residual value and useful life of 10 years. On December 31, 2002, there is objective evidence of impairment of the building and its value in use is measured at P1,600,000 while its fair value less cost to sell is at P1,500,000. On December 31, 2004, the value in use of the building is at P2,300,000 while its fair value less cost to sell is P1,700,000. Required: Based on the result of your audit, determine the following: __________1. Impairment loss for the year ended December 31, 2002 __________2. Carrying amount of building on December 31, 2002 __________3. Depreciation expense for the year ended December 31, 2003
On January 1, 2001, MM Inc. constructed a building classified as owner occupied property at a cost of P3,000,000 with no residual value and useful life of 10 years. On December 31, 2002, there is objective evidence of impairment of the building and its value in use is measured at P1,600,000 while its fair value less cost to sell is at P1,500,000. On December 31, 2004, the value in use of the building is at P2,300,000 while its fair value less cost to sell is P1,700,000.
Required: Based on the result of your audit, determine the following:
__________1. Impairment loss for the year ended December 31, 2002
__________2. Carrying amount of building on December 31, 2002
__________3.
__________4. Carrying amount of building on December 31, 2004
__________5. Gain on reversal of impairment loss for the year ended December 31, 2004
__________6. Depreciation expense for the year ended December 31, 2005
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