NEED EXPLANATION QUICKLY!!!

Use the following information for the next five questions.

On December 1, 2019, Joy Corporation decided to dispose

of an item of plant that is carried in its records at a cost of

P450,000, with accumulated depreciation of P80,000.

Depreciation on the plant since it was originally acquired

has been charged at P5,000 per month. The company

undertook all the necessary actions to be able to classify

the asset as held for sale. It is estimated that it could sell

the plant for its fair value, P350,000, incurring P10,000

selling costs in the process.

On December 31, 2019, the plant had not been sold but,

due to a shortage of this type of plant, there had been an

increase in the fair value to P360,000 while expected costs

to sell remain at P10,000.

15. Any gain on a subsequent increase in the fair value

less cost to sell of a noncurrent asset classified as held

for sale should be treated as follows:

a. The gain should be recognized in full.

b. The gain should not be recognized.

c. The gain should be recognized but not in excess of

the cumulative impairment loss.

d. The gain should be recognized but only in retained

earnings.

16. If Joy Corporation sold the plant on March 1, 2020 for

a net proceeds of P351,000, what amount should be

included as gain on disposal in the entity's statement of

comprehensive income for the year ended 31 December

2020?

a. P19,000 c. P11,000

b. P12,000 d. P 1,000

17. An entity has an asset that was classified as held for

sale. However, the criteria for it to remain as held for

sale no longer apply. The asset should be measured at

a. The lower of its carrying amount and its recoverable

amount

b. The higher of its carrying amount and its recoverable

amount

c. The lower of its carrying amount on the basis that it

had never been classified as held for sale and its

recoverable amount

d. The higher of its carrying amount on the basis that it

had never been classified as held for sale and its

recoverable amount

18. If Joy Corporation had not sold the plant as of

December 31, 2020 and the recoverable amount at

that date is P315,00, the plant should be carried in

Joy's statement of financial position at 31 December

2020 at

a. P370,000 c. P315,000

b. P350,000 d. P305,000

19. In the period in which the criteria are no longer met,

any required adjustment to the carrying amount of a

non-current asset that ceases to be classified as held

for sale shall be included in

a. Profit or loss from continuing operations.

b. Profit or loss from discontinued operations.

c. Other comprehensive income.

d. Retained earnings.

20. A chain of bicycle shops holds bicycles for short-term

hire and for sale. The bicycles available for hire are

used for two or three years and then sold by the shops

as second-hand models. All shops sell both new and

second-hand bicycles.

The entity sold a new bicycle for P5,000 (cost P4,000)

and a second-hand bicycle for P1,000 (carrying

amount P500).

Which statement is correct?

a. The bicycles for hire are reported in the statement

of financial position as property, plant and

equipment.

b. The entity shall reclassify the bicycles for hire as

non-current assets held for sale when they cease

to be rented and become held for sale.

c. The difference between the net disposal proceeds

and the carrying amount of the second-hand

bicycles is recognized as other income in profit or

loss.

d. All of the above.

21. What is a 'disposal group' as defined in PFRS 5?

a. A group of assets to be disposed of, by sale or

otherwise, together as a group in a single

transaction, and liabilities directly associated with

those assets that will be transferred in the

transaction.

b. Operations and cash flows that can be clearly

distinguished, operationally and for financial

reporting purposes, from the rest of the entity.

c. The smallest identifiable group of assets that

generates cash inflows that are largely

independent of the cash inflows from other assets

or groups of assets.

d. Assets other than goodwill that contribute to the

future cash flows of both the cash-generating unit

under review and other cash-generating units.

22. Which statement is incorrect regarding a 'disposal

group' classified as held for sale in accordance with

PFRS 5?

a. The measurement basis required for non-current

assets classified as held for sale is applied to the

group as a whole, and any resulting impairment

loss reduces the carrying amount of the noncurrent

assets in the disposal group in the order of

allocation required by PAS 36.

b. Assets and liabilities included within a disposal

group classified as held for sale, must be

presented separately on the face of the statement

of financial position.

c. An entity shall not reclassify or re-present amounts

presented for the assets and liabilities of disposal

groups classified as held for sale in the statements

of financial position for prior periods to reflect the

classification in the statement of financial position

for the latest period presented.

d. None, all the statements are correct.

23. Excel Corp. plans to dispose of a group of net assets

that form a disposal group. The net assets at

December 31, 2020, are

Carrying amount

Goodwill P 6,000,000

Property, plant, and equipment 18,000,000

Inventory 10,000,000

Financial assets at fair value 7,000,000

Financial liabilities ( 4,000,000)

P37,000,000

Under applicable PFRSs, property, plant, and

equipment would be stated at P16 million and

inventory at P9 million. The fair value less cost to sell

of the disposal group is P25 million. Assuming that the

disposal group qualifies as held for sale, what is the

amount to be presented in the statement of financial

position as assets classified as held for sale?

a. P37,000,000 c. P29,000,000

b. P34,000,000 d. P25,000,000

24. PFRS 5 requires the following disclosures about assets

(or disposal groups) that are held for sale:

I. Description of the non-current asset or disposal

group

II. Description of facts and circumstances of the sale

(disposal) and the expected timing

III. Impairment losses and reversals, if any, and

where in the statement of comprehensive income

they are recognized

IV. If applicable, the reportable segment in which the

non-current asset (or disposal group) is

presented in accordance with PFRS 8

a. I, II and III only c. II, III and IV only

b. I, II and IV only d. I, II, III and IV