Bryn Corporation started its operations at the beginning of 2019.  An equipment was acquired on May 1, 2019 at a price of P6,000,000. The company incurred import duties and non-refundable taxes amounting to P375,000 and an installation cost of P75,000. Total estimated useful life of the equipment is 5 years and to be depreciated under sum-of-the years' digits.  The company estimates total dismantling cost of P150,000 upon the asset's retirement.  The prevailing rate of interest on this date was 10%. The present value factor of a single payment at 10% for 5 periods is 0.6209. 

REQUIREMENT:
How much is the carrying amount of the equipment at December 31, 2019?

How much is the amount taken to profit or (loss) for the year ended December 31,2020?

Answer rating: 100% (QA)

To calculate the carrying amount of the equipment at December 31 2019 we need to consider the initia... View the full answer