AU Co. acquired a fixed asset for $36,000 on November 1, 20x1 when the exchange rate was $1 = P23.00. At December 31, 20x1, the entity's year-end, the supplier of the fixed asset has not been paid and the exchange rate at that time was $1 = P25.00. On the December 31, 20x1 statement of financial position, what will be the values for the fixed asset and the creditor who was unpaid?On January 1, 20x6, the Riza Co. purchased equipment for P300,000. The equipment was being depreciated over an estimated life of 10 years on the straight-line method, with no estimated residual value. On December 31, 20x9, the equipment was sold for P200,000. The historical cost/constant peso statement of profit or loss prepared for the year ended December 31, 20x9 should include how much gain or loss from this sale?

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Answered: AU Co. acquired a fixed asset for…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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AU Co. acquired a fixed asset for $36,000 on November 1, 20x1 when the exchange rate was $1 = P23.00. At December 31, 20x1, the entity's year-end, the supplier of the fixed asset has not been paid and the exchange rate at that time was $1 = P25.00. On the December 31, 20x1 statement of financial position, what will be the values for the fixed asset and the creditor who was unpaid?
On January 1, 20x6, the Riza Co. purchased equipment for P300,000. The equipment was being depreciated over an estimated life of 10 years on the straight-line method, with no estimated residual value. On December 31, 20x9, the equipment was sold for P200,000. The historical cost/constant peso statement of profit or loss prepared for the year ended December 31, 20x9 should include how much gain or loss from this sale?

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