A building owned and previously occupied by the company was vacated and was being negotiated for sale. The sale is highly probable and is expected to be consummated within 6 months. The building had a cost of P20,000,000 and accumulated depreciation of P12,000,000. The fair value of the building is P9,000,000. The company expects to incur selling costs of P1,500,000 on the disposal of this building. Assume that the building was sold after the end of the reporting period at P9,200,000, after incurring disposal cost of P1,300,000. How is the profit (before income tax) during the year of sale affected?

A building owned and previously occupied by the company was vacated and was being negotiated for sale. The sale is highly probable and is expected to be consummated within 6 months. The building had a cost of P20,000,000 and accumulated depreciation of P12,000,000. The fair value of the building is P9,000,000. The company expects to incur selling costs of P1,500,000 on the disposal of this building. Assume that the building was sold after the end of the reporting period at P9,200,000, after incurring disposal cost of P1,300,000. How is the profit (before income tax) during the year of sale affected?

Name: A building owned and previously occupied by the company was vacated an
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Description: A building owned and previously occupied by the company was vacated and was being negotiated for sale. The sale is highly probable and is expected to be consummated within 6 months. The building had a cost of P20,000,000 and accumulated depreciation

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 29CE

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