ABC Company purchased a machinery on January 1, 2018 for Php800,000 that has an estimated useful life
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Question:
ABC Company purchased a machinery on January 1, 2018 for Php800,000 that has an estimated useful life of 8 years. On December 31 of 2019 and 2020, the fair value of the machinery amounted to Php550,000, and Php600,000, respectively. On October 1, 2021, the entity decided to sell the machinery in the early part of 2022. The entity uses revaluation model in accounting for its property, plant, and equipment.
The fair market value of the machinery and its estimated disposal are as follows: | |||||||||
| Fair value | Disposal cost | ||||||||
| Ocotber 1, 2021 | 400,000 | 25,000 | |||||||
| December 31, 2021 | 405,000 | 20,000 | |||||||
How much is the revaluation surplus after the reclassification? | |||||||||
| 17,500.00 | |||||||||
| 72,000.00 | |||||||||
| 90,000.00 | |||||||||
| 150,000.00 | |||||||||
| None of these |
Expert Answer:
Cost of Machinery 800000 Life of machiney 8 years Depreciation per year 800000 8 Depreciation per year 100000 Asset bought on Jan01 2018 Carrying valu... View the full answer
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