On January 2, 2022, Milk Tea Company acquired a building costing P6,000,000. Milk Tea Company estimated that the useful life of the property is 20 years. Milk Tea Company's policy is to depreciate all depreciable assets using the straight-line method, without scrap. On January 2, 2027, the building was remeasured at P3,000,000 and with a remaining revised useful life of 20 years. On January 2, 2032, Milk Tea Company converted the property into investment property when the fair value is P3,500,000. On January 2, 2032, what amount of gain or impairment recovery Should the company recognize? P125,000 P1,250,000 P1,125,000 None
On January 2, 2022, Milk Tea Company acquired a building costing P6,000,000. Milk Tea Company estimated that the useful life of the property is 20 years. Milk Tea Company's policy is to depreciate all depreciable assets using the straight-line method, without scrap. On January 2, 2027, the building was remeasured at P3,000,000 and with a remaining revised useful life of 20 years. On January 2, 2032, Milk Tea Company converted the property into investment property when the fair value is P3,500,000. On January 2, 2032, what amount of gain or impairment recovery Should the company recognize? P125,000 P1,250,000 P1,125,000 None
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:On January 2, 2022, Milk Tea Company acquired a building costing P6,000,000. Milk Tea Company
estimated that the useful life of the property is 20 years. Milk Tea Company's policy is to
depreciate all depreciable assets using the straight-line method, without scrap.
On January 2, 2027, the building was remeasured at P3,000,000 and with a remaining revised
useful life of 20 years.
On January 2, 2032, Milk Tea Company converted the property into investment property when
the fair value is P3,500,000. On January 2, 2032, what amount of gain or impairment
recovery Should the company recognize?
P125,000
P1,250,000
P1,125,000
None
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