1. On January 1, 2015, Rich Company purchased a new building at a cost of P3,000,000. Depreciation was computed on the straight line basis at 4% per year. On January 1, 2020, the building was revalued at a fair value of P4,000,000. To record the revaluation the following journal entry was made: (Dr.) Building 1,000,000 (Cr.)Retained Earnings 1,000,000 What is the Gross Replacement Cost on January 1, 2020?

a.5,000,000

b. 3,000,000

c.1,000,000

d. 4,000,000

2.) On January 1, 2015, Rich Company purchased a new building at a cost of P3,000,000. Depreciation was computed on the straight line basis at 4% per year. On January 1, 2020, the building was revalued at a fair value of P4,000,000. To record the revaluation the following journal entry was made: (Dr.) Building 1,000,000 (Cr.)Retained Earnings 1,000,000 Correcting entry will include which of the following?

a. Debit Building of P1,000,000

b. Credit Retained Earnings at 600,000

c. Debit Accumulated Depreciation of 400,000

d. Credit Revaluation Surplus of P1,000,000

3.) Hope Company had a machinery costing P3,000,000 when purchased on January 2, 2015. Estimated useful life of the asset was for 20 years with no salvage value at the end of its useful life. Hope uses the straight line method of Depreciation. On January 2, 2020, Hope is evaluating the machinery for possible impairment. The machinery has a remaining useful life of 5 years and is expected to generate cash inflows of P500,000 per year. Hope has determined that the rate implicit in current market transaction for similar asset is 10%. Available information as of January 2, 2020also showed that the appropriate market price for the same asset is P1,950,000. Estimated cost of disposal, P150,000.What amount of Impairment loss, if any, is to be recognized?

a. 450,000

b. 355,000

c. 0

d. 300,000