On January 1, 20x1, Elite Company purchased equipment with a cost of P8,800,000, useful life of...

 

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On January 1, 20x1, Elite Company purchased equipment with a cost of P8,800,000, useful life of 10 years and no residual value. The entity used straight light depreciation. At every year-end, the entity determined that impairment indicators are present. There is no change in the useful life or residual value. Fair value less cost of disposal is P6,480,000 and P7,120,000 for 20x1 and 20x2, respectively. Value in use is P6,840,000 and P6,560,000 for 20x1 and 20x2, respectively. Q1) What is the impairment loss for 20x1? Q2) How much is the accumulated depreciation of the equipment as of December 31, 20x1 after any impairment loss has been recognized? Q3) What is the gain on reversal of impairment for 20x2? Q4) What is the depreciation for 20x3? On January 1, 20x1, Elite Company purchased equipment with a cost of P8,800,000, useful life of 10 years and no residual value. The entity used straight light depreciation. At every year-end, the entity determined that impairment indicators are present. There is no change in the useful life or residual value. Fair value less cost of disposal is P6,480,000 and P7,120,000 for 20x1 and 20x2, respectively. Value in use is P6,840,000 and P6,560,000 for 20x1 and 20x2, respectively. Q1) What is the impairment loss for 20x1? Q2) How much is the accumulated depreciation of the equipment as of December 31, 20x1 after any impairment loss has been recognized? Q3) What is the gain on reversal of impairment for 20x2? Q4) What is the depreciation for 20x3?

Answer rating: 100% (QA)

Q1 Impairment loss for 20x1 The impairment loss for 20x1 is the higher of the following Zero theres ... View the full answer