10 On December 31, 2011, Condor Company committed to a plan to sell a manufacturing facility in its present condition and classifies the facility as held for sale at this date. After a firm purchase commitment is obtained, the buyer's inspection of the property identifies environmental damage not previously known to exist. Condor Company is required by the buyer to make good the damage, which will extend the period required to complete the sale beyond one year. However, the entity has initiated actions to make good the damage, and satisfactory rectification of the damage is highly probable. On December 31, 2011, the carrying value of the facility is P4,000,000 and its fair market value is P3,600,000. In its December 31, 2011 statement of financial position, Candor Company should properly report this manufacturinn facility as Should no longer be included in Dec 31, 2011 Balance Sheet Should be included among Property, Plant an Equipment at P4,000,000 Should be reported separately as non current assets held for disposal and valued at P3,600,000 11 Question On January 2, 2011, Chandler Company committed to a plan to sell its other building and classified this asset as held for sale. The carrying value of the building as of January 2, 2011 is P5,000,000. Chandler Company priced the building at P5,500,000, which is equal to its fair market value. During 2011, the market conditions that existed at the date the building was classified initially as held for sale deteriorate and as a result, the asset is not sold at the end of 2011. During 2011, the company actively solicited but did not receive any reasonable offers to purchase the building and, in response, reduced the price to P4,800,000. The building continues to be actively marketed at a price that is reasonable given the change in market conditions. In Chandler Company's December 31, 2011 balance sheet the building - should be included as property, plant and equipment valued at P4,800,000 should be included as property, plant and equipment valued at P5,000,000 should be reported separately as non current asset held for sale valued at P4,800,000 should be reported separately as non current asset held for sale valued at P5,000,000 12 Question On December 31, 2011, Potter Company's warehouse has a carrying value of P3,500,000 with a remaining useful life of 10 years, but its fair market value was P3,300,000. As of December 31, 2011, Potter Company intends to sell the warehouse to a buyer after it vacates the warehouse. The time necessary to vacate the warehouse is usual and customary for sales of such assets. In its December 31, 2011 statement of financial position, Potter Camnanu chaud include the ..achen Property, plant & equipment at P3,300,000 Property, plant & equipment at P3,500,000 Non current asset held for sale at P3,300,000 Non current asset held for disposal at P3,500,000 14 Question Carlo Company is planning to dispose a collection of assets. Carlo Company designates these assets as a disposal group. The carrying amount of these assets immediately before classification as held for sale was P20,000,000. Upon being classified as held for sale, the assets were revalued to P18,000,000. The company feels that it would cost P1,000,000 to sell the disposal group. What would be the carrying amount of the disposal group in the comnanv'e arenunte after ite placeifinntinn P17,000,000 P18,000,000 P19,000,000 P20,000,000 15 Question Henry Company is planning to dispose a collection of assets. Henry Company designates these assets as a disposal group and the carrying amount of these assets immediately before classification as held for sale was P16,000,000. Upon being classified as held for sale, the assets were revalued to P14,400,000. Henry Company feels that the fair value less cost to sell would be P13,600,000. How would the reduction in the value of the assets on classification as held for sale he treater in the financial statement? The company recognizes a loss of P1,600,000 immediately before classification as held for sale and then recognizes an impairment loss of P800,000 The company recognizes an impairment loss of P2,400,000 The company recognizes an impairment loss of P1,600,000 The company recognizes a loss of P2,400,000 immediately before classifying the disposal group as held for sale 16 Question On July 1, 2014, Bulls Company incurred a loss of P300,000 on the disposal of an investment. The operating income for full year ending December 31, 2014 was expected to be P500,000. In the income statement for the quarter ended Santamar 30 2014. how much of this loss should be disclosed separately? none P75,000 P150,000 P300,000 17 Question An inventory loss from a permanent market dacline of P360,000 occurred in May 2014. Lakers Company appropriately recorded this lose in May 2014 after its March 31, 2014 quarterly report was issued. What amount of inventory loss should be reported in the quarterly income statement for the hree monthe ancier lune 30 2014? none P90,000 P180,000 P360,000