Petty Corp. purchased a building on January 1, 2017, for P6,000,000. The same had an expected

useful life of 10 years. Straight-line depreciation method is in place for similar items with no residual

value. On December 31, 2020, the asset was appraised as having a sound value (depreciated

replacement cost) of P5,400,000. On December 31, 2023, as a result of an evidence of a possible

impairment, the asset was tested for possible impairment loss based on its current recoverable

amount at P1,200,000 with a revised remining useful life of only two years.

Requirements:

1. How much is credited to the revaluation surplus as a result of the revaluation in 2020?

2. What is the correct depreciation to be recognized in 2021?

3. How much is the loss on impairment should be recognized on December 31, 2023?

4. What is the depreciation expense in 2024?