lex Company reported an impairment loss of P5,200,000 in its income statement for the year 2016. This loss was related to a building that was acquired on January 1, 2012 with a cost of P80,000,000 (no residual value). Depreciation on the building is computed on a straight-line basis at the rate of 4% per year. Depreciation for the year 2017 was computed based on the asset’s recoverable amount at December 31, 2016. On December 31, 2021, the entity decided to measure its building using revaluation model. This building was then appraised to a fair value of P50,000,000. What amount of gain on impairment recovery should Alex Co

lex Company reported an impairment loss of P5,200,000 in its income statement for the year 2016. This loss was related to a building that was acquired on January 1, 2012 with a cost of P80,000,000 (no residual value). Depreciation on the building is computed on a straight-line basis at the rate of 4% per year. Depreciation for the year 2017 was computed based on the asset’s recoverable amount at December 31, 2016. On December 31, 2021, the entity decided to measure its building using revaluation model. This building was then appraised to a fair value of P50,000,000. What amount of gain on impairment recovery should Alex Co

Name: Alex Company reported an impairment loss of P5,200,000 in its income s
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Description: Alex Company reported an impairment loss of P5,200,000 in its income statement for the year 2016. This loss was related to a building that was acquired on January 1, 2012 with a cost of P80,000,000 (no residual value). Depreciation on the building is

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 66P

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At the end of 2020, Magenta Manufacturing Company discovered that construction cost had been capitalized as a cost of the factory building in 2015 when it should have been treated as a cost of production equipment installation costs. As a result of the misclassification, the depreciation through 2018 was understated by 110,000, and depreciation for 2019 was understated by 90,000. What would be the consequences of correcting for the misclassification of the property cost? a. The taxpayer uses the FIFO inventory method, and 25% of goods produced during the period were included in the ending inventory. b. The taxpayer uses the LIFO inventory method, and no new LIFO layer was added during 2019.
Samgyup Company reported an impairment loss of P5,200,000 in its income statement for the year 2016. This loss was related to a building that was acquired on January 1, 2012 with a cost of P80,000,000 (no residual value). Depreciation on the building is computed on a straight-line basis at the rate of 4% per year. Depreciation for the year 2017 was computed based on the asset’s recoverable amount at December 31, 2016.On December 31, 2021, the entity decided to measure its building using revaluation model. This building was then appraised to a fair value of P50,000,000.What amount of gain on impairment recovery should Samgyup Company report in its 2021 income statement?
Putin Company reported an impairment loss of P5,200,000 in its income statement for the year 2016. This loss was related to a building that was acquired on January 1, 2012 with a cost of P80,000,000 (no residual value). Depreciation on the building is computed on a straight-line basis at the rate of 4% per year. Depreciation for the year 2017 was computed based on the asset’s recoverable amount at December 31, 2016.On December 31, 2021, the entity decided to measure its building using revaluation model. This building was then appraised to a fair value of P50,000,000.What amount of gain on impairment recovery should Putin Company report in its 2021 income statement?
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SEAT Inc. acquired the following assets in January of 2015. Equipment, estimated service life, 5 years; salvage value, $16,200 $503,700 Building, estimated service life, 30 years; no salvage value $648,000 The equipment has been depreciated using the sum-of-the-years’-digits method for the first 3 years for financial reporting purposes. In 2018, the company decided to change the method of computing depreciation to the straight-line method for the equipment, but no change was made in the estimated service life or salvage value. It was also decided to change the total estimated service life of the building from 30 years to 40 years, with no change in the estimated salvage value. The building is depreciated on the straight-line method. (a) Prepare the journal entry to record depreciation expense for the equipment in 2018. (b) Prepare the journal entry to record depreciation expense for the building in 2018.
On January 1, 2013, Raven Company acquired a building at cost of P 5 000 00. The building has been depreciated on the basis of a 20 – year life.On January 1, 2018, an appraisal of the building showed replacement at P 8 000 000 with no change in useful life.1. Before income tax, what amount should be credited to revaluation surplus on January 1, 2018?2. What is the depreciation for 2018?3. What is the revaluation surplus that should be reported in the December 31, 2018 statement of financial position?
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