On December 31, 2019, after recording depreciation for the year, an item of equipment with cost of

P4,000,000 and accumulated depreciation of P1,600,000 was revalued to have a fair market value of
P3,600,000 and a remaining useful life of six years. The company adopts the policy of reporting this item
of property, plant and equipment at revalued amount less any subsequent accumulated depreciation
and subsequent impairment losses.

The company

Restates its accumulated depreciation

Proportionately with the change in the gross carrying amount of the asset and transfers a portion of the
surplus as the asset is being used by the entity. On December 31, 2021, a second revaluation indicates
that the equipment had a fair value of P2,000,000.

REQUIRED:

Prepare journal entries to record

(a)

The revaluation on December 31, 2019;

Adjusting entries at December 31, 2020 and at December

(b)

(c)

31, 2021;

The revaluation on December 31, 2021; and (d) adjusting entries at December 31, 2022.