1. ABC has identified indications that its plant is impaired. The plant has a carrying amount of P56,000,000. An independent valuer determined the following:

-Replacement cost of the plant P90,000,000

-Actual life 15 years

-Effective life 25 years

-Remaining economic life 20 years

ABC's tax rate is 30%.

1. How much is the revaluation surplus, net of tax?

A. P 12,775,000

B. P 16,000,000

C. P 11,200,000

D. P 18,250,000

2. ABC acquires equipment on 1/1/20x1, information on costs is as follows:

Purchase price, gross of P10,000 trade discount 800,000

Non-refundable purchase taxes 20,000

Delivery and handling costs 40,000

Installation costs 30,000

Present value of decommissioning and restoration costs 10,000

Assume the equipment has a useful life of 10 years and a residual value of P90,000. Entity A uses the straight-line method of depreciation. On December 31, 20x2, Entity A revalues the equipment at a fair value of P820,000. There is no change in the residual value and the remaining useful life of the asset.

How much are the revaluation surplus on December 31, 20x2 and revised depreciation expense in 20x3 and in subsequent periods, respectively?

A. Revaluation surplus - P 89,000 ; Revised annual depreciation - P91,050

B. Revaluation surplus - P 83,000 ; Revised annual depreciation - P90,250

C. Revaluation surplus - P 92,000 ; Revised annual depreciation - P92,150

D. Revaluation surplus - P 90,000 ; Revised annual depreciation - P91,250