Avocado Inc. acquire a machinery at a cost of P10,000,000 on January 1, 2021 to be used in the business. It has an estimated life of 5 years and a residual value of P1,000,000. On January 1, 2024, the management of Avocado Inc decided to classify the said machinery as held for sale. The fair value less cost of disposal was estimated at P3,800,000. On July 1, 2024, the machinery was sold for P3,000,000. The carrying amount of the machinery on July 1, 2024 is P5,400,000.
Avocado Inc. acquire a machinery at a cost of P10,000,000 on January 1, 2021 to be used in the business. It has an estimated life of 5 years and a residual value of P1,000,000. On January 1, 2024, the management of Avocado Inc decided to classify the said machinery as held for sale. The fair value less cost of disposal was estimated at P3,800,000. On July 1, 2024, the machinery was sold for P3,000,000. The carrying amount of the machinery on July 1, 2024 is P5,400,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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TRUE OR FALSE?
Avocado Inc. acquire a machinery at a cost of P10,000,000 on January 1, 2021 to be used in the business. It has an estimated life of 5 years and a residual value of P1,000,000. On January 1, 2024, the management of Avocado Inc decided to classify the said machinery as held for sale. The fair value less cost of disposal was estimated at P3,800,000. On July 1, 2024, the machinery was sold for P3,000,000.
The carrying amount of the machinery on July 1, 2024 is P5,400,000.
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