Answer Problems 1,2,3 and 4

Problem 1. In June 30, 2019, the interim report of Diamond Co. shows the fe Equipment (at cost) Accumulated Depreciation The equipment account is composed of two machines used in the in the manufar was acquired at a cost of P3,000,000 and had a carrying amount of P1800 carried at P1,700,000. Both machines are measured using the cost modelar port of Diamond Co. shows the following balances of its equipment account: P5,000,000 1,500,000 of two machines used in the in the manufacture of its major product: Fabricating and finishing Fabricating and had a carrying amount of P1,800,000 at June 30, 201, while finishing had cost of P2,000,000 and was ameasured using the cost model, and depreciated on a straight line basis over a 10-year period tors of Diamond Co. decided to change the basis of measuring the equipment from the cost model to the to P1800,000 with an expected useful life of 6 years and finishing was revalued to P1 500,000 with On December 31, 2019, the board of directors of Diamond Co. decided to char revaluation model. Fabricating was revalued to P1,000,000 with an expected usefu an expected useful life of 5 years a. What amount is to be recognized in OCI on December 31, 20192 b. What amount is to be recognized in profit and loss on December 31, 20192 building on Jan 1, 2009 for P1,250,000. The building has a useful life of 50 years and depreciated on a Problem 2. Sapphire Corp purchased a building on Jan 1, 2009 for P1,250,000. Thehu 2019 the company revalued the building to P1,600,000. It is the policy of the company to transfer the excess straight line method. On lan 1, 2019, the company revalued the building to P1.60 the revaluation surplus to retained earnings. On December 31, 2019, what would be the balance of the depreciation on revaluation from the revaluation surplus to retained earnings. On revaluation surplus, assuming no other revaluations took place? Problem Bbc acquired an excavator on January 1, 2016 for P1,000,000. The cauinmantle u. The equipment is depreciated on a straight-line basis over a 10- The no residual value at the end of its useful fe. The fair value of the equipment approximates its carrying value at December 31 2016 and 2018 On December 31, 2017, the fair value is determined to be P800,000; on December 31, 2019 the fair value is determined to be Em buses the elimination approach for revaluation accounting. Prepare a table showing the Cost. Depreciation expense for the year Accumulated depreciation balance for the year, carrying amount at the end of the year, revaluation surplus balance at the end of the year for 2016, 2017, 2018, 2019. Show the journal entries for the years with a revaluation transaction. Problem 4. At the end of 2019, Pearl Company tests a machine for impairment. The machine carried in the books at its carrying amount of P1,500,000 with an estimated remaining life of 10 years. The management determined that the machine's recoverable amount will be determined using the value-in-use calculation of a pretax rate of 15%. The following is the estimated future cash flows from the asset: 2020 0.8lay 7 Year 2020 2021 2022 2023 2024 Future Cash Flow P221,650 214,500 205,500 247,250 253,250 Year 2025 2026 2027 2028 2029 Future Cash Flow P248,250 241.230 255,330 242,340 228,500 In 2020 and 2022, recoverable amount of the machine remained the same. At the end of 2023, cost of P250,000 was incurred to enhance the machine's performance. The revised estimated cash flows are as follows: 2024 Future Cash Flow Future Cash Flow P303,210 2027 319,500 2025 327,500 2028 331,000 2026 317,210 2029 279,990 Requirements: (use 5decimal places for PV factors) a) Compute the amount of impairment loss if any at December 31, 2019 b) How much would be the revised value-in-use at the end of 2023? c) Compute the carrying amount of the asset in 2023 before additional/reversal of impairment. d) Journalize any adjustment to be made on the asset in 2023. Problem 1. In June 30, 2019, the interim report of Diamond Co. shows the fe Equipment (at cost) Accumulated Depreciation The equipment account is composed of two machines used in the in the manufar was acquired at a cost of P3,000,000 and had a carrying amount of P1800 carried at P1,700,000. Both machines are measured using the cost modelar port of Diamond Co. shows the following balances of its equipment account: P5,000,000 1,500,000 of two machines used in the in the manufacture of its major product: Fabricating and finishing Fabricating and had a carrying amount of P1,800,000 at June 30, 201, while finishing had cost of P2,000,000 and was ameasured using the cost model, and depreciated on a straight line basis over a 10-year period tors of Diamond Co. decided to change the basis of measuring the equipment from the cost model to the to P1800,000 with an expected useful life of 6 years and finishing was revalued to P1 500,000 with On December 31, 2019, the board of directors of Diamond Co. decided to char revaluation model. Fabricating was revalued to P1,000,000 with an expected usefu an expected useful life of 5 years a. What amount is to be recognized in OCI on December 31, 20192 b. What amount is to be recognized in profit and loss on December 31, 20192 building on Jan 1, 2009 for P1,250,000. The building has a useful life of 50 years and depreciated on a Problem 2. Sapphire Corp purchased a building on Jan 1, 2009 for P1,250,000. Thehu 2019 the company revalued the building to P1,600,000. It is the policy of the company to transfer the excess straight line method. On lan 1, 2019, the company revalued the building to P1.60 the revaluation surplus to retained earnings. On December 31, 2019, what would be the balance of the depreciation on revaluation from the revaluation surplus to retained earnings. On revaluation surplus, assuming no other revaluations took place? Problem Bbc acquired an excavator on January 1, 2016 for P1,000,000. The cauinmantle u. The equipment is depreciated on a straight-line basis over a 10- The no residual value at the end of its useful fe. The fair value of the equipment approximates its carrying value at December 31 2016 and 2018 On December 31, 2017, the fair value is determined to be P800,000; on December 31, 2019 the fair value is determined to be Em buses the elimination approach for revaluation accounting. Prepare a table showing the Cost. Depreciation expense for the year Accumulated depreciation balance for the year, carrying amount at the end of the year, revaluation surplus balance at the end of the year for 2016, 2017, 2018, 2019. Show the journal entries for the years with a revaluation transaction. Problem 4. At the end of 2019, Pearl Company tests a machine for impairment. The machine carried in the books at its carrying amount of P1,500,000 with an estimated remaining life of 10 years. The management determined that the machine's recoverable amount will be determined using the value-in-use calculation of a pretax rate of 15%. The following is the estimated future cash flows from the asset: 2020 0.8lay 7 Year 2020 2021 2022 2023 2024 Future Cash Flow P221,650 214,500 205,500 247,250 253,250 Year 2025 2026 2027 2028 2029 Future Cash Flow P248,250 241.230 255,330 242,340 228,500 In 2020 and 2022, recoverable amount of the machine remained the same. At the end of 2023, cost of P250,000 was incurred to enhance the machine's performance. The revised estimated cash flows are as follows: 2024 Future Cash Flow Future Cash Flow P303,210 2027 319,500 2025 327,500 2028 331,000 2026 317,210 2029 279,990 Requirements: (use 5decimal places for PV factors) a) Compute the amount of impairment loss if any at December 31, 2019 b) How much would be the revised value-in-use at the end of 2023? c) Compute the carrying amount of the asset in 2023 before additional/reversal of impairment. d) Journalize any adjustment to be made on the asset in 2023