On January 3, 2018, Brave company acquired an item of property, plant and equipment at a cost of P1,000,000. The asset's estimated residual value is P100,000 and estimated useful life of 10 years. The company uses straight-line of depreciation computed to the nearest month. On October 1, 2021, the asset was reclassified as "held for sale". Its fair value on this date was P500,000 and the cost to sell was estimated at P20,000. In January 2022, the asset was sold for P500,000 incurring disposal costs of P10,000 on the sale. How much impairment loss from reclassifying the asset as held for sale is reported for year 2021?
On January 3, 2018, Brave company acquired an item of property, plant and equipment at a cost of P1,000,000. The asset's estimated residual value is P100,000 and estimated useful life of 10 years. The company uses straight-line of depreciation computed to the nearest month. On October 1, 2021, the asset was reclassified as "held for sale". Its fair value on this date was P500,000 and the cost to sell was estimated at P20,000. In January 2022, the asset was sold for P500,000 incurring disposal costs of P10,000 on the sale. How much impairment loss from reclassifying the asset as held for sale is reported for year 2021?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 11E: On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an...
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