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1 PAS 16: Property, Plant and Equipment Answer Key: Use The Following Information For The Next Five Questions
1 PAS 16: Property, Plant and Equipment Answer Key: Use The Following Information For The Next Five Questions
2. The equipment has an estimated useful life of 10 years and a residual value of ₱200,000. Entity A uses the straight
line method of depreciation. How much is the carrying amount of the equipment on December 31, 20x3?
a. 788,846
b. 802,846
c. 795,846
d. 764,846
3. On December 31, 20x3, Entity A revalues the equipment at a fair value of ₱820,000. There is no change in the
residual value and the remaining useful life of the asset. How much is the revaluation surplus on December 31,
20x3?
a. 17,154
b. 24,154
c. 55,154
d. 31,154
5. Entity A sells the equipment for ₱870,000 on January 1, 20x5. Entity A incurs selling costs of ₱20,000 on the sale.
How much is the gain (loss) on the sale?
a. 118,571
b. 132,500
c. 147,143
d. 152,673
Solutions:
1. Solution
Purchase price, net of trade discounts (1M – 10K) 990,000
Freight costs 20,000
Testing costs 30,000
Net disposal proceeds of samples generated
during testing (5,000)
Present value of dismantlement costs 6,209
Initial measurement 1,041,209
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