On Dec 31,2020, JD Company traded equipment with an original cost of P400,000 and accumulated depreciation of P 160,000 for another equipment. In addition, JD Company received P20,000 cash in connection with this exchange. The exchange transaction lacks the necessary commercial substance. What is the amount of gain should JP recognize assuming the fair value of asset received is P240,000? 

2.Love Company purchased on Oct 1,2019 an equipment for P800,000. The equipment had an estimated useful life of 8 years. The estimated salvage was estimated at P50,000 at the end of its useful life.The equipment is being depreciated using the double declining method. What is the carrying value of the equipment on Dec 31,2020? 

3.) Killua Company purchased an equipment for P540,000 on January 2,2020. The equipment had an estimated salvage value of P60,000 and estimated useful life of 5 years. The equipment being depreciated using the sum-of-years digit method. What is the carrying value of the equipment on Dec 31,2021? 

4.)The ff: expenditures relating to the plant building were mad by Fox Company during the year ended Dec 31,2010:Replacement of the old single roof with fireproof tile roof worth P296,000, Repainted the plant building worth P20,000, Major investment to the electrical wiring system worth P70,000. How much should be capitalized in 2020?

Answer rating: 100% (QA)

In the exchange transaction of equipment when commercial substance is lacking the gain recognized is limited to the lesser of the following two amount... View the full answer