8. On January 1, 20x1 Step Company owns a machine with a carrying amount of P2,400,000. The machine was purchased four years earlier for P4,000,000. Step uses the straight-line method of depreciation. During December 20x1, Step determined that the machine suffered permanent impairment of its operational value and will not be economically useful in its production process after December 31, 20x1. Step Co. sold the machine for P650,000, net of disposal cost, on January 5, 20x2. The 20x1 financial statements of Step Co. were authorized for issuance on March 31, 20x2. In its profit or loss for the year ended December 31, 20x1, Step should recognize a loss of a. 2,000,000 c. 1,350,000 b. 1,750,000 d. 0