On January 1, 2022, Villanueva Company classified noncurrent assets as held for sale that had a carrying amount of P2,500,000. On this date, the assets are expected to be sold for P2,300,000. Reasonable disposal cost to be incurred upon sale was expected at P100,000. As of December 31, 2022, the asset had not been sold. After considering its options, management decided to put back the noncurrent asset for use in operations. On that date, Villanueva’s financial managers estimated the noncurrent asset was now expected to be selling at P1,800,000 with the disposal cost of P50,000, while depreciation for 2022 was computed at P500,000 if the noncurrent asset was not classified as held for sale. At how much should the asset be recorded upon reclassification as “held for use” on December 31, 2022?
On January 1, 2022, Villanueva Company classified noncurrent assets as held for sale that had a carrying amount of P2,500,000. On this date, the assets are expected to be sold for P2,300,000. Reasonable disposal cost to be incurred upon sale was expected at P100,000. As of December 31, 2022, the asset had not been sold. After considering its options, management decided to put back the noncurrent asset for use in operations. On that date, Villanueva’s financial managers estimated the noncurrent asset was now expected to be selling at P1,800,000 with the disposal cost of P50,000, while depreciation for 2022 was computed at P500,000 if the noncurrent asset was not classified as held for sale. At how much should the asset be recorded upon reclassification as “held for use” on December 31, 2022?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2022, Villanueva Company classified noncurrent assets as held for sale that had a carrying amount of P2,500,000. On this date, the assets are expected to be sold for P2,300,000. Reasonable disposal cost to be incurred upon sale was expected at P100,000.
As of December 31, 2022, the asset had not been sold. After considering its options, management decided to put back the noncurrent asset for use in operations. On that date, Villanueva’s financial managers estimated the noncurrent asset was now expected to be selling at P1,800,000 with the disposal cost of P50,000, while depreciation for 2022 was computed at P500,000 if the noncurrent asset was not classified as held for sale.
At how much should the asset be recorded upon reclassification as “held for use” on December 31, 2022?
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How much is the additional loss, related to the return of the asset to its
original classification as non-current, shall be reported in the 2022
statement of comprehensive income
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