Question
In January 2017, Dindo Company purchased machinery costing P500,000. The machinery has an estimated residual value of P50,000 and an estimated useful life of eight
In January 2017, Dindo Company purchased machinery costing P500,000. The machinery has an estimated residual value of P50,000 and an estimated useful life of eight years. The asset is being depreciated using the straight-line bases. At December 31, 2019, it became apparent that the machine suffered permanent impairment in value. It was determined that the machines recoverable value was P200,000 with a remaining useful life of two years and a residual value of P20,000.
a.How much is the impairment loss on December 31, 2019?
b.How much is the depreciation expense on December 31, 2019, after the impairment?
c.How much is the carrying amount of the asset on December 31, 2020?
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