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Use the following information for the next four questions:
On December 31, 20x1, an entity classifies machinery with
historical cost of 3,000,000, accumulated depreciation of
P2,000,000 and remaining useful life of 5 years as held for sale. The
entity depreciates its machinery using the straight line method
with no residual value. The fair value of the machinery on
December 31, 20x1 is ?800,000 while costs to sell are estimated at
P50,000. The sale price of the machinery is 800,000.
11. Which of the following shall be recognized by the entity in its
20x1 financial statements?
Scanned with CamScannerHeld for sale asset
a, P800,000 s Impairment loss
b. P750,000 P150,000
c. P750,000 P200,000
d. PO * —. P250,000
P250,000
12.
13. & Bee 20x2, the machinery remains unsold, The
air of the machinery on December 31, 20x2 is P700,000
while costs to sell’ are estimat ) f
fed at .
decreased the sale price to P650 at P50,000. The entity
: 000. Which of the followin
shall be recognized by the entity in its 20x2 fendi
statements?
Held for sale asset Impairment loss
a. P700,000 * P100,000
b. 650,000 P100,000
c. P650,000 " P150,000
d. PO : P100,000
14. Requirement; Provide the journal entry on December 31, 20x2.
15. On December 31, 20x3, the machinery remains unsold. The
fair value of the machinery on December 31, 20x3 is P1,100,000
while costs to sell are estimated at P50,000. The failure to
locate a buyer and complete the sale is beyond the entity’s
control. The entity further decreased the sale price to P600,000.
Which of the following shall.be recognized by the entity in its
20x3 financial statements? f .
Held for sale asset Gain on impairment recovery
a. 1,100,000 450,000
b. P1,000,000 P350,000
c. 750,000 oe
he 350,000
Scanned with CamScanner16.
17.
18.
19.
_ rate of 30%. Assume there are no temporary differences.
Requirement: Provide the journal entry on December 31, 2043
On December 31, 20x4, the. machinery remains unsold, Te
fair value of the machinery on December 31, 20x4 is P1 000,
while costs to sell are estimated at P50,000. The entity did »,
further decrease the sale price. Which of the following shal
recognized by the entity in its 20x4 financial statements?
a. Property, plant and equipment for P400,000
b. Property, plant and equipment for P1,000,000.
c. Noncurrent asset held for sale for P950,000.
d. Noncurrent asset held for sale for P1,000,000.
Requirement: Provide the journal entry on December 31, 20,4,
On April 1, 20x1, an entity decides to dispose a major produg
line. All the conditions for held for sale classification unde
PERS 5 are met. On this date, the carrying amount of the ne
assets of the major product line is P1,000,000. The entity
expects gross proceeds of P600,000 from the disposal. Direc
costs associated to the decision to dispose the major produ
line amount to P50,000.
From January 1 to March 31, the profit from the product lineis
P200,000, while from April 1 to December 31, the loss from the
product line is P120,000. The entity is subject to an income tax
In relation to the product line, how much profit (loss) will the
entity recognize in its 20x1 financial statements?
Discontinued operations
Continuing operations
a. 200,000 399,000 d
b.. 140,000 399,000
c. (250,000) (84,000)
d. 0 (259,000)
Scanned with CamScanner5. The statements of financial position and profit or loss of an
entity on December 31, 20x1 shows the following information:
Cash and cash equivalents 1,800,000
Trade and other receivables 3,600,000 |
Inventories 10,800,000 |
Investment property (Cost model) 4,200,000 —
Investment in associate 2,400,000
Property, plant and equipment 15,000,000
Total assets 37,800,000
Trade and other payables “14,700,000
Scanned with CamScannercurrent fax payable
ferred tax liability
inary share capital
petained earnings - Dec. 31, 20x1
ther components of equity
otal liabilities & equity
Revenue
Cost of sales
Gross profi 4
pistribution costs
Administrative expenses
Finance costs
Share of profit of associates
Profit for the year
5,400,000
2,100,000
6,000,000
8,100,000
___ 1,500,000
6,720,000
— 2,400,000) _
4,320,000
(936,000)
(1,080,000)
(360,000)
288,000
2,232,000
On December 31, 20x1, the entity commits to a plan to sell a
component of an entity that represents a major geographical area
of operations. All the conditions of PFRS 5 are met. Information on
the component is as follows:
Financial position:
Accounts receivable
Inventory
Equipment
Accounts payable
Financial performance:
Revenue
Cost of sales
Distribution costs
Administrative expenses
Additional information:
* The entity determines
costs to sell of P1,600,
that the equip’
000. The carrying amounts 0
240,000
672,000
3,360,000
432,000
2,000,000
1,200,000
280,000
432,000
ment has a fair value less
f the other
Scanned with CamScannerassets and the liability approximate their fair value less costs
to sell.
Requirement:.Prepare the December 31, 20x1 classified statement of
financial position and the statement of profit or loss of the entity.
Ignore the effects of income taxes.
Scanned with CamScanner