Required: 1. Prepare the journal entries to removed the equipment from property, plant and equipment and classify it as held for sale on January 1, 2023. 2. Prepare the journal entries to measure the equipment held for sale at the lower of carrying amount and fair value less cost of disposal on January 1, 2023. 3. Prepare the journal entries to record the sale of equipment on June 30, 2023.
Required: 1. Prepare the journal entries to removed the equipment from property, plant and equipment and classify it as held for sale on January 1, 2023. 2. Prepare the journal entries to measure the equipment held for sale at the lower of carrying amount and fair value less cost of disposal on January 1, 2023. 3. Prepare the journal entries to record the sale of equipment on June 30, 2023.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem on Non-current Assets held for sale
On January 1, 2020, an entity acquired an equipment at a cost of P4,000,0000 to be used in the ordinary course of business. The
equipment has an estimated useful life of 10 years and a residual value of P500.000.
On January 1, 2023, the equipment was classified as held for sale. On such date, the fair value cost of disposal was estimated at
P1,900,000. On June 30, 2023, the equipment was sold for P1,500,000.
Required:
1. Prepare the journal entries to removed the equipment from property, plant and equipment and classify it as held for sale on
January 1, 2023.
2. Prepare the journal entries to measure the equipment held for sale at the lower of carrying amount and fair value less cost of
disposal on January 1, 2023.
3. Prepare the journal entries to record the sale of equipment on June 30, 2023.
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