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(A) Problem 27-7 (Page 790): Straight-line Method with Specific Accounting Policy: Parable Company: Parable Company revealed the following depreciation policy on machinery: A full year depreciation is taken in the year of acquisition. No depreciation is taken in the year of disposition. The estimated useful life is five years. The straight line method is used. On June 30, 2020, the entity sold for P2,300,900 a machine acquired in 2017 for P4, 200,000. The estimated residual value was P600,000. 1. What amount of gain on disposal should be recorded in 2020? a. P 140,000 b. P 260,000 C. P 620,000 d. P 980,000(D) Problem 28-7 (Page 826): Vanity Company: At the beginning of current year, Vanity Company purchased (B) Problem 27-9 (Page 791): Bitter Company: a mineral mine for P26.400,000 with removable ore estimated at 1, 200,000 tons. Bitter Company acquired a machinery on April 1, 2020. After it has extracted all the ore, the entity will be required Cost by law to restore the land to the original condition at an Residual value 1,200,000 estimated cost of P2. 400,000. The present value of the Estimated useful life 120,000 estimated restoration cost is P1.800,000. 8 years un -. :. . The entity believed it will be able to sell the property 2. What is the depreciation for 2020 using sum of years' digits afterwards for P3.000,000. (item 1 of book)? During the current year, the entity incurred P3.600.000 of a. P 180,000 development costs preparing the mine for production and b. P 240,000 removed 80,000 tons and sold 60,000 tons of ore. c. P 120,000 What amount should be reported as depletion for the current year? d. P 160,000 6. What amount should be reported as depletion for the 3. What is the depreciation for 2020 using double declining current year? balance (item 3 of book)? a. P 1,920,000 a. P 300,000 b. P 1,440,000 b. P 150,000 c. P1,940,000 c. P 225,000 d. P 1,455,000 d. P 202,500 (E) Problem 28-11 (Page 828): Lethargic Company: (C) Problem 27-25 (Page 798): Real Company: On July 1, Lethargic Company, a calendar year entity. purchased the rights to a mine. The total purchase price wy Real Company used a hand tool in the manufacturing P14,000,000, of which P2,000,000 was allocable to the land Was activities. On January 1, 2020, there are 800 of such tools on Estimated reserves were 1,500,000 tons. The entity expects to hand at cost of P200 each. extract and sell 25,000 tons per month. Acquisition and retirement during 2020 and 2021 are: The entity purchased new equipment on July 1. The equipment was purchased for P8,000,000 and had a useful Retirement and Estimated value life of 4 years with no residual value. Acquisition and cost retirement proceeds of tools at year end 7. Assuming that the 25,000 tons per month expectation was met, what is the depletion for the current year? 2020 400 @ P300 300 @ P50 200,000 2021 900 @ P400 700 @ P70 350,000 a. P1,200,000 b. P2,400,000 Retirement may be assumed to be on a first-in, first-out basis. c. P1,950,000 d. P1,400,000 4. What is the depreciation expense for 2020 using the 8. What is the depreciation of the equipment for the current year? retirement method? a. P 1,600,000 5. What is the depreciation expense for 2020 using the b. P 2,000,000 replacement method? c. P 1,000,000 d. P 1,200,000