Surreal Company accounted for non-current assets using the revaluation model. On October 1, 2021, the entity classified a land as held for sale. At that date, the carrying amount of the land was P5,000,000 and the balance
Surreal Company accounted for non-current assets using the revaluation model. On October 1, 2021, the entity classified a land as held for sale. At that date, the carrying amount of the land was P5,000,000 and the balance in the revaluation surplus was P1,500,000. At same date, the fair value of the land was estimated at P5,500,000 and the cost of disposal at P100,000. On December 31,2021, the fair value less cost of disposal of the land did not change. The land was sold on January 31,2022 for P6,000,000.
Required:
1. What is the adjusted carrying amount of the land on December 31,2021?
a. 5,000,000
b. 5,500,000
c. 5,400,000
d. 3,500,000
2. What amount should be reported as impairment loss for 2021?
a. 100,000
b. 400,000
c. 500,000
d. 0
3. What amount should be reported as revaluation surplus on December 31,2021?
a. 1,500,000
b. 2,000,000
c. 1,000,000
d. 1,900,000
4. What amount should be reported as gain on disposal of land in 2022?
a. 1,000,000
b. 2,600,000
c. 500,000
c. 600,000
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