Problem Solving - Cost Model, Revaluation model, Impairment of asset and Revaluation of asset.

Solve the questions number 1 to 6, assuming that the companys policy is to account for assets under cost model.

And Solve questions number 7 to 13, assuming that the companys policy is to account for asset under revaluation model.

On December 31,2022 , the management revised its estimate of useful life to be 8 years from the date of acquisition and neither indication of impairment nor reversal of impairment is expected. At the end of 2023 , the asset can be sold for P900,000 on which commission of 2% based on selling price is to be paid to the broker. Determine the following as a result of your audit: Assuming the company's policy is to account for this asset under cost model: 1. How much is the amount of machinery - net reported in in its statement of financial position as of December 31, 2021? Chapter 5: Audit of Fixed Assets 2. How much is the amount of impairment loss reported in its 2021 statement of comprehensive income? 3. How much is the amount of machinery - net reported in in its statement of financial position as of December 31, 2022? 4. How much is the amount of depreciation expense reported in 2023 statement of comprehensive income? 5. How much is the amount of gain on recovery (impairment reversal) reported in 2023 statement of comprehensive income? 6. How much is the amount of machinery - net reported in in its statement of financial position as of December 31, 2023? Assuming the company's policy is to account for this asset under revaluation model: 7. How much is the amount of machinery - net reported in in its statement of financial position as of December 31, 2021? 8. How much is the amount of impairment loss reported in its 2021 statement of comprehensive income? 9. How much is the amount of machinery - net reported in in its statement of financial position as of December 31, 2023? 10. How much is the amount of depreciation expense reported in 2023 statement of comprehensive income? 11. How much is the amount of gain on recovery (impairment reversal) reported in 2023 statement of comprehensive income? 12. How much is the amount of revaluation surplus reported as component of equity as of December 31, 2023? 13. How much is the amount of machinery - net reported in in its statement of financial position as of December 31, 2023? On December 31,2022 , the management revised its estimate of useful life to be 8 years from the date of acquisition and neither indication of impairment nor reversal of impairment is expected. At the end of 2023 , the asset can be sold for P900,000 on which commission of 2% based on selling price is to be paid to the broker. Determine the following as a result of your audit: Assuming the company's policy is to account for this asset under cost model: 1. How much is the amount of machinery - net reported in in its statement of financial position as of December 31, 2021? Chapter 5: Audit of Fixed Assets 2. How much is the amount of impairment loss reported in its 2021 statement of comprehensive income? 3. How much is the amount of machinery - net reported in in its statement of financial position as of December 31, 2022? 4. How much is the amount of depreciation expense reported in 2023 statement of comprehensive income? 5. How much is the amount of gain on recovery (impairment reversal) reported in 2023 statement of comprehensive income? 6. How much is the amount of machinery - net reported in in its statement of financial position as of December 31, 2023? Assuming the company's policy is to account for this asset under revaluation model: 7. How much is the amount of machinery - net reported in in its statement of financial position as of December 31, 2021? 8. How much is the amount of impairment loss reported in its 2021 statement of comprehensive income? 9. How much is the amount of machinery - net reported in in its statement of financial position as of December 31, 2023? 10. How much is the amount of depreciation expense reported in 2023 statement of comprehensive income? 11. How much is the amount of gain on recovery (impairment reversal) reported in 2023 statement of comprehensive income? 12. How much is the amount of revaluation surplus reported as component of equity as of December 31, 2023? 13. How much is the amount of machinery - net reported in in its statement of financial position as of December 31, 2023