1. Discuss the four purposes of the Conceptual Framework (16)
2. An asset must meet two recognition criteria before being recognized in financial statements. State and explain these two criterions. (8).
3. On 1 January 2016, Pinks Ltd bought buildings for P540,000. At that date it was decided that the buildings had a useful life of 50 years. On January 2018. It was decided to revalue the buildings to its open market value of P600,000. On 31 December 2019, the property was sold for P620,000. No depreciation is charged in the year of disposal.

Prepare a journal for the revaluation of the property on 1 January 2018. (10 marks)

4. From (c) above, calculate profit or loss on the disposal of the property. (8)
5. On January 2017, Hideit Pharmacy bought machinery for P48,000. It was decided that this machinery should be depreciated using the straight-line method over a period of 10 years with an estimated residual value of P4,000. On 1 January 2019, the directors decided to change the method of depreciation for the remaining life of the asset to 25% reducing balance. Calculate the depreciation charge for the year ended 31 December 2019. (8)