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Chapter 11

Problem I
1.
Contributions of cash by the operators
Cash
KK Company
Cerise Company
Contribution by joint operators.

360,000
180,000
180,000

Use of cash and loan to buy machinery & equipment and raw materials
Machinery and equipment
96,000
Cash
Loans payable machinery and equipment
Contribution by joint operators.
Materials
Accounts payable
Acquisition of materials.
Labor incurrence
Payroll
Cash
Accrued payroll
Annual labor.
Loans from the bank
Cash
Bank loans payable
Amount borrowed.

60,000
36,000

78,000
78,000

86,400
84,000
2,400

72,000
72,000

Repayment of loan machinery and equipment and other factory expenses


Loan payable machinery and equipment
12,000
Cash
Partial payment of loan.
Accounts payable
Cash
Payment of trade creditors.
Factory overhead control heat, light and power
Cash
Payment of manufacturing expenses such as heat, light
and power.
Depreciation of machinery and equipment
Factory overhead control depreciation
Accumulated depreciation
Depreciation of equipment.
Transfer of materials, labor and overhead to Work-in-Process

12,000

50,400
50,400

156,000
156,000

9,600
9,600

Work-in-process
Payroll
Materials
Factory overhead control heat, light and power
Factory overhead control depreciation
Allocation of costs to work-in-process
Transfer of Work-in-Process to Finished Goods Inventory.
Finished goods
Work-in-process
Allocation to finished goods

309,600
86,400
57,600
156,000
9,600

216,000
216,000

Transfer of Finished Goods Inventory to Joint Operators throughout the year


KK Company
96,000
DD Company
96,000
Finished goods
Delivery of output to joint operators.

192,000

2.
Cash
Contribution Drei
Contribution Cerise
Bank loan
Balance, 12/31/x4

180,000
180,000
60,000

60,000
84,000
12,000
50,400
156,000

Machinery and equipment


Labor
Machinery and equipment
Accounts payable
Factory overhead control

57,600

Work-in-Process
Labor
86,400
Materials
57,600
Factory Overhead heat, etc. 156,000
Factory Overhead depreciation 9,600
Balance, 12/31/x4
93,600

216,000

to Finished Goods

3.
a. Total assets, P282,000
b. KKs investment, P84,000
c. DDs investment, P84,000
December 31, 20x4
Assets
Current Assets
Cash
Finished goods inventory
Work-in-Process inventory
Materials inventory
Total current assets
Non-current Assets
Equipment
Less: Accumulated depreciation
Total Assets

P 57,600
24,000
93,600
20,400
P 195,600
P 96,000
9,600

86,400
P282,000

Liabilities and Net Assets


Current Liabilities
Accrued payroll
Accounts payable
Non-current Liabilities
Bank loan payable
Loan payable machinery and equipment
Total Liabilities
Net Assets
Total Liabilities and Net Assets
Joint Operators Equity
KK Company: Contributions January 1, 20x4
Cost of inventory distributed
DD Company: Contributions January 1, 20x4
Cost of inventory distributed
Total Joint Operators Equity

2,400
27,600

P 60,000
24,000

P 180,000
( 96,000)
P 180,000
( 96,000)

P 30,000
__84,000
P 114,000
168,000
P282,000

P 84,000
P 84,000
P168,000

Problem II
1. Ayala Corp. shall account for its interest in the joint operation as follows:
Current assets (50% x P720,000)
Property, plant and equipment (60% x P1,200,000)
Expenses (60% x 720,000)
Liabilities (75% x P960,000)
Revenue (55% x P1,200,000)
Interests in Joint Operation
To recognize the share of Entity A in the assets, liabilities,
revenues and expenses as follows:

360,000
720,000
432,000
720,000
660,000
132,000

2. The assets, liabilities, revenue and expenses are recognized and combined with those of
Ayalas own financial statements. The interest in joint operations at the end of the reporting
period is reduced to P228,000, computed as follows:
Interests in Joint Operation
Less: Share in assets, liabilities, revenues and expenses
Interest in operation, ending balance

P 360,000
132,000
P 228,000

Problem III
1. The joint operator, Entity A account for their interests in the joint operation as follows:
Entity Xin 20x4
Profit or loss (construction costs)
Cash/Accumulated depreciation/Trade payables
To recognize the construction costs incurred in 20x4

4,800,000

Cash
Profit or loss (construction revenue)
To recognize the construction costs incurred in 20x4

8,400,000

4,800,000

8,400,000

Entity Yin 20x4


Profit or loss (construction costs)
Cash/Accumulated depreciation/Trade payables
To recognize the construction costs incurred in 20x4

7,200,000

Cash
Profit or loss (construction revenue)
To recognize the construction costs incurred in 20x4

8,400,000

7,200,000

8,400,000

Problem IV
The joint operator, Entity K account for their interests in the joint operation as follows:
January 1, 20x4 (P12,000,000 / 5 = P2,400,000)
Property, plant and equipment (interest in an aircraft)
Cash
To recognize the purchase of an ownership-interest in a
jointly controlled aircraft.

2,400,000
2,400,000

In 20x4
Cash
Profit or loss (rental income)
To recognize income earned in renting to others the use of
the aircraft in 20x4.

12,000
12,000

Profit or loss (aircraft operating expenses)


Cash
To recognize the costs of running an aircraft in 20x4.

180,000

Profit or loss (depreciation expense)


Accumulated depreciation (interest in an aircraft
To recognize depreciation of an ownership-interest in a
jointly controlled aircraft in 20x4: P12,000,000/20 years =
P600,000/5 operators = P120,000
share for each joint operator.

120,000

180,000

120,000

Problem V
1. The following are the summaries of the above transactions for a joint operation in the form of
a partnership:
Event
a.
b.
c.
d.
e.
f. *

Investment in
Joint Operation
Dr.
Cr.
P 12,000
120,000
6,000
180,000
P588,000
________
P318,000

6,000
___3,000
P597,000

AA
Dr.

BB
Cr.
P12,000
120,000

Dr.

CC
Cr.

Dr.

Cr.
P 6,000

120,000
P204,000
3,600
___3,000
P210,600

P60,000
P312,000
3,600

________
P252,000

________
P315,600

______
P 60,000

P72,000
3,600
6,000
_______
P81,600

10,800
_______
P 16,800

NI**
Cash***
Settlement
Totals

_297,000
P597,000

________
P597,000

________
P210,600

__112,200
P364,200

________
P315,600

_147,000
P195,000

_______
P81,600

31,800
P48,600

_______
P597,000

________
P597,000

_153,600
P364,200

________
P364,200

________
P315,600

_120,600
P315,600

_______
P81,600

_33,000
P81,600

* purchases, P300,000; cost of goods sold, P294,000; ending inventory P6,000 x 50% = P3,000.
**NI Net Income Allocation
AA
Allowance for cleaning-up operations
Commission:
Aljon: 40% of P204,000
Elerie: 40% of P312,000
Mac: 40% of P72,000
Balance (75%: 25%)

BB

CC
P 3,000

P81,600

81,600
124,800
28,800
40,800

P124,800
30,600

10,200

Total
3,000

28,800
_______

Total
P112,200 P135,000 P31,800
**Total credits of P597,000 Total debits of P318,000 = P279,000, net income.

P279,000

2. The cash settlement entry (refer to No. 1 for the computation of settlement) would be as
follows:
AA, capital
153,600
BB, capital
120,600
CC, capital
33,000
Therefore, BB will pay P120,600 and CC will pay, P33,000 to AA as final settlement for the joint
operations.
Problem VI
Schedule of Determination and Allocation of Excess
Date of Acquisition January 1, 20x4
Cost of investment
Consideration transferred
Less: Book value of stockholders equity of Son:
Common stock (P3,600,000 x 30%)
Retained earnings (P1,080,000 x 30%)
Allocated excess (excess of cost over book value)
Less: Over/under valuation of assets and liabilities:
Increase in inventory (P240,000 x 30%)
Increase in land (P960,000 x 30%)
Increase in building (P600,000 x 30%)
Decrease in equipment (P840,000 x 30%)
Increase in bonds payable (P120,000 x 30%)

P2,016,000
P 1,080,000
324,000
P
72,000
288,000
180,000
( 252,000)
( 360,000)

1,404,000
612,000

Positive excess: Goodwill (excess of cost over fair value)


The over/under valuation of assets and liabilities are summarized as follows:
Anton Co.
Anton Co.
Book value
Fair value
Inventories (sold in 20x4)
P1,200,000
P1,440,000
Land
1,080,000
2,040,000
Buildings net ( 10 year remaining life)
1,800,000
2,400,000

252,000
P 360,000
(Over) Under
Valuation
P 240,000
960,000
600,000

Equipment net ( 7 year remaining life)


Bonds payable (due January 1, 20x9)
Net

1,440,000
( 1,200,000)
P4,320,000

600,000
(1,320,000)
P5,160,000

A summary or depreciation and amortization adjustments is as follows:


Over/
30%
Account Adjustments to be amortized
Under
thereof
Inventories (sold in 20x4)
P 240,000
P 72,000
Land
960,000
288,000
Buildings net ( 10 year remaining life)
600,000
180,000
Equipment net ( 7 year remaining life)
( 840,000)
( 252,000)
Bonds payable (due January 1, 20x9)
( 120,000)
( 36,000)
Net
P 840,000
P 252,000

Life
1
10
7
5

( 840,000)
( 120,000)
P 840,000
Current
Year(20x4)
P 72,000
18,000
(36,000)
( 7,200)
P 46,800

The following are entries recorded by the parent in 20x4 in relation to its investment in joint
venture:
January 1, 20x4:
(1) Investment in DD Company
2,016,000
Cash
2,016,000
Acquired 30% joint control in DD Company.
January 1, 20x4 December 31, 20x4:
(2) Cash
Investment in DD Company (P720,000 x 30%)
Record dividends from DD Company.

216,000
216,000

December 31, 20x4:


(3) Investment in DD Company
Investment income (P1,440,000 x 30%)
Record share in net income of DD Company.

432,000
432,000

December 31, 20x4:


(4) Investment income
Investment in DD Company.
Record amortization of allocated excess of inventory,
equipment, buildings and bonds payable.

46,800
46,800

Thus, the investment balance and investment income in the books of TT Company is as follows:
Investment in Joint Venture (DD Company)
Cost, 1/1/x4
2,016,000 216,000
NI of Anton
46,800
(1,440,000 x 30%)
432,000
Balance, 12/31/x4
2,185,200
Investment Income
Amortization

46,800
432,000
385,200

Dividends Son (720,000x 80%)


Amortization

NI of Son
(P1,440,000 x 30%)
Balance, 12/31/x4

To check the balance of Investment in Joint Venture (DD Company):

DD Companys Stockholders Equity, 12/31/20x4:


Common stock
Retained earnings
Retained earnings,1/1/20x4
Net income 20x4
Dividends 20x4
Book value of stockholders equity of DD Company,12/31/20x4
Multiplied by: Interest in Joint Venture
Book value of Interest in Joint Venture
Add: Unamortized allocated excess 30% thereof
P252,000 P46,800, amortization)
Goodwill
Investment in Joint Venture (DD Company) equity method
Multiple Choice Problems
1. a
Books of X
Inv. in JO
4,000 6,500
2,500
Books of Y
Inv. in JO
2,500
4,000

6,500

Books of Z
Inv. in JO
2,500
4,000

X, capital
2,500

P3,600,000
P 1,080,000
1,440,000
( 720,000)

1,800,000
P5,400,000
30%
P1,620,000
205,200
360,000
P2,185,200

Journal entry for settlement should be:


Z, capital.. 6,500
X, capital
2,500
Y, capital
4,000

Y. capital
4,000

Z, capital
6,500

6,500
2.
Total credits - Investment in Joint OperationsP 25,810
Total debits - Investment in Joint Operations. 19,750
Net income or total gain (credit balance).P 6,060
3. d
Jose, capital
8,500 investment
1,212 share in net income (P6,060 x 2/10)
9,712
4. a The 20,000 shares should be valued at market value, thus, P800,000 (20,000 shares x P40
per share)

5. b
Jose, capital
P800,000 P 198,000 (4,500 x P44) Sales
3,000
125,000 (5,000 x P25)
4,700
13,600* (13,600 x P1) - Cash dividend
168,000 (6,000 x P28) - Sales
266,000 (7,600 x P35)
P807,700 P 770,600
P 37,100

20,000 shares at P40/share


Expenses

Joint operation loss


*

9/30 Shares issued (6,000 + 10,000 + 4,000)


10/20 Sold
11/ 1 Stock dividend (20,000 4,500) x 20%
11/15 Sold
Balance of shares outstanding before cash dividend

20,000
(4,500)
3,100
(5,000)
13,600

Therefore, Roxas share would be P11,130 (P37,100 x 6,000/20,000 shares)


6. c
Share in net loss
P37,100 x (10,000/20,000)

Investment in Joint Operations


P400,000 Investment (10,000 shares x P40)
P18,550
P381,450

7. b
Unrealized loss due to decline in the value of shares at the time of investment
(P62 P40) x 4,000 shares
Share in joint operation (P37,100 x 4/20)
Reduction of loss by cash dividend (P13,600 x 4/20)

P68,000
__7,420
P98,140

8. a
before net income or loss

Investment in Joint Operations


15,000
25,000 ending inventory
10,000 net income

9. a (A- P10,000 x 50% = P5,000; B P10,000 x 30% = P3,000; C P10,000 x 20%)


10. a
Purchases
Contr/Invest
Expenses

Joint Operations
20,000
77,000 Sales (?)
20,000
800
1,800
42,600

Anson, Capital
Unsold merchandise 600 20,000
18,600 Profit(50%)

77,000
34,400 (P16,000+
P18,400)
2,800 (P600 + P2,200)
Unsold merchandise
37,200 Net profit

600

38,600
38,000 to Alas

11. c refer to No. 10 computation.


12. a
Purchases
Freight-in
Freight-out

Investment in Joint Operations


10,000
7,200 sales
240
5,120 unsold
260
(P10,000 + P240) x 1/2
10,500
12,320
1,820

Santo, capital
10,000 Contribution/Invest
910 Share in NI
10,910

13. a refer to No. 12 for computation


14. c
Investment in Joint Operations
6,500
3,500 Sales
3,000

before sale
Net loss
N, capital
1,100
14,500
13,400

O, capital
1,100
6,500
5,400

Distribution of Loss:
M
300
(1,100)
P ( 900)

Salary
Balance, equally

N
P

(1,100)
P(1,100)

Total
300
(3,300)
P(3,000)

(1,100)
P(1,100)

15. a refer to No. 14 for computation


16. a

Purchases
Interest expense

Investment in Joint Operations


45,000
48,700 Sales
18,000 16,800
80
40 Dividend
50
100
63,130
65,640
2,510
2,510 Net income

McKee, capital
48,700
45,000
40
80
1,225 share in NI
2,405

17. a refer to No 16 for computation


Nelson, capital
McKee

Nelson, capital
16,800
18,000
100
50
1,225 share in NI
2,405

2,405
2,405

18. b
Investment in Joint Operations
950
800 sales
150
600
1,100 1,400
300 Net income

Purchases
Expenses

Bar, capital
800
950
270
800
1,220
420 due to

Due from

Car, capital
600
150
30
600
180
420

The entry for the settlement would be as follows (Car will pay Bar P420):
Bar, capital
420
Car, capital
420
Distribution of net income
Bar
Commission on net purchases:
20% x P950
Commission on sales:
25% x P800
25% x P600
Balance, equally

Car

P190

P190

200
(120)
P270

Total

P150
(120)
P 30

200
150

(240)
P300)

19. b refer to No. 18 for computations.


20. c
Investment in Joint Operations
15,000 before P/L
10,500 unsold merchandise
Salary Reyes 12,000 25,500 net income
13,500

unsold merch.

21. b
Revenues
Total cash receipts (P78,920 + P65,245)
Less: Cash investments (P30,000 + P20,000)
Cash sales
Add: Proceeds from sale of remaining assets
Total Revenue
Less: Expenses (P62,275 + P70,695)
Net income

Tan, capital
27,000
10,500
4,500 share in NI (1/3 x P13,500)
10,500
31,500
21,000

P144,345
50,000
P 94,345
60,000
P154,345
132,970
P 21,375

22. c
Receipts

Benin, capital
78,920
30,000 Contribution
62,275 Disbursement
12,825 Share in NI (3/5)
78,920
105,100
26,180

Receipts

Sucat, capital
65,425
20,000 Contribution
70,695 Disbursement
8,550 Share in NI (2/5)
65,425
99,245
33,820

23. d
Ns books: it shows P5,000 receivable from P, and P3,000 payable to O; thus, N should
receive net cash of P2,000:
O, capital
3,000
Cash
2,000
P, capital
5,000
Os books: it shows P5,000 receivable from P, and P2,000 payable to N; thus, O should
receive net cash of P3,000:
N, capital
2,000
Cash
3,000
P, capital
5,000
Ps books: it shows P2,000 payable to N and P3,000 payable to O; thus, in final settlement, P
should pay a total of P5,000; P2,000 and P3,000 to N and O, respectively:
N, capital
2,000
O, capital
3,000
Cash
5,000
24.
The Investment in Basket Co. as of December 31 is as follows:
Acquisition cost, January 1, 2013
Add (deduct):
Share in net income (P90,000 x 40%]
Share in dividends (P30,000 x 40%)
Amortization of allocated excess
Investment balance on December 31
Cost of investment
Less: Book value of interest acquired [40% x (P1,400,000 P500,000)]
Allocated excess
Less: Over/undervaluation of assets and liabilities:
Increase in building (P140,000 x 40%)
Increase in trademark (P210,000 x 40)
Amortization of allocated excess:
Building: P56,000 / 7 years
Trademark: P84,000 / 10 years

P 500,000
36,000
( 12,000)
( 16,400)
P 507,600
P 500,000
360,000
P 140,000
56,000
84,000
P

8,000
8,400

25. b
The joint arrangement is a joint venture because it needs unanimous consent to all parties
involved. The parties recognize their rights to the net assets of Harrison Company as
investments and account for them using the equity method.
The Investment in Basket Co. as of December 31 is as follows:
Acquisition cost, January 1, 2013
Add (deduct):
Share in net income (P90,000 x 40%]

P 500,000
36,000

Share in dividends (P30,000 x 40%)


Amortization of allocated excess
Investment balance on December 31

( 12,000)
( 16,400)
P 507,600

Cost of investment
Less: Book value of interest acquired [40% x (P1,400,000 P500,000)]
Allocated excess
Less: Over/undervaluation of assets and liabilities:
Increase in building (P140,000 x 40%)
Increase in trademark (P210,000 x 40)

P 500,000
360,000
P 140,000

Amortization of allocated excess:


Building: P56,000 / 7 years
Trademark: P84,000 / 10 years
Total
26. b refer to No. 25 for further discussion.
The Income from Investment in Basket Co. on December 31 is as follows:
Share in net income (P90,000 x 40%]
Amortization of allocated excess
Income from Investment on December 31

56,000
84,000
P

8,000
8,400
P 16,400

P 36,000
( 16,400)
P 19,600

27. d
The joint arrangement is a joint venture because it needs unanimous consent to all parties
involved. The parties recognize their rights to the net assets of Harrison Company as
investments and account for them using the equity method.
The Investment in Goldman Co. as of December 31, 2015 is as follows:
Acquisition cost, January 1, 2013
Add (deduct):
Share in net income [(P140,000 x 3 years) x 40%]
Share in dividends [(P50,000 x 3 years) x 40%]
Amortization of allocated excess
Investment balance on December 31
Cost of investment
Less: Book value of interest acquired (40% x P1,200,000)
Allocated excessP 120,000
Less: Over/undervaluation of assets and liabilities
Goodwill

P 600,000
168,000
(60,000)
(
0)
P 708,000
P 600,000
480,000
0
P 120,000

There is no indication as to impairment of goodwill.


28. d
To determine whether a contractual arrangement gives parties control of an arrangement
collectively, it is necessary first to identify the relevant activities of that arrangement. That is,
what are the activities that significantly affect the returns of the arrangement?
When identifying the relevant activities, consideration should be given to the purpose and
design of the arrangement. In particular, consideration should be given to the risks to which
the joint arrangement was designed to be exposed, the risks the joint arrangement was

designed to pass on to the parties involved with the joint arrangement, and whether the
parties are exposed to some or all of those risks.
In many cases, directing the strategic operating and financial policies of the arrangement
will be the activity that most significantly affects returns. Often, the arrangement requires the
parties to agree on both of these policies. However, in some cases, unanimous consent may
be required to direct the operating policies, but not the financial policies (or vice versa). In
such cases, since the activities are directed by different parties, the parties would need to
assess which of those two activities (operating or financing) most significantly affects returns,
and whether there is joint control over that activity. This would be the case whenever there is
more than one activity that significantly affects returns of the arrangements, and those
activities are directed by different parties.
Based on the ownership structure, even though Wallace can block any decision, Wallace
does not control the arrangement, because Wallace needs Zimmerman to agree
therefore joint control between Wallace and Zimmerman (since their votes and only their
votes, together meet the requirement). Because they are the only combination of parties
that collectively control the arrangement, it is clear that Wallace and Zimmerman must
unanimously agree.
The appropriate method for the joint venture is the equity method.
Investment in Gold Co. on December 31, 2015 is as follows:
Share in net income (P140,000 x 40%)
Amortization of allocated excess
Income from Investment on December 31, 2015

The Income from


P 56,000
(
0)
P 56,000

29. d
No joint control multiple combinations of parties could be used to reach agreement and
collectively control the arrangement (i.e., Wallace and Zimmerman or Wallace and
American could vote together to meet the requirement). Since there are multiple
combinations, and the contractual agreement does not specify which parties must agree,
there is no unanimous consent.
It should be noted that since there is no joint control as indicated per problem and the
presence of 50% ownership holding is presumed to give significant influence of Wallace over
Goldman, unless it can be clearly demonstrated that this is not the case. Therefore,
Goldman Company is considered as an associate instead of a joint venture.
The appropriate method for Investment in Associates is the equity method. The Income from
Investment in Gold Co. on December 31, 2015 is as follows:
Share in net income (P140,000 x 40%)
P 56,000
Amortization of allocated excess
(
0)
Income from Investment on December 31, 2015
P 56,000
30. d
No joint control multiple combinations could be used to reach agreement.
It should be noted that since there is no joint control as indicated per problem and the
presence of 35% ownership holding is presumed to give significant influence of Wallace over
Goldman, unless it can be clearly demonstrated that this is not the case. Therefore,
Goldman Company is considered as an associate instead of a joint venture.

The appropriate method for Investment in Associates is the equity method. The Income from
Investment in Gold Co. on December 31, 2015 is as follows:
Share in net income (P140,000 x 40%)
P 56,000
Amortization of allocated excess
(
0)
Income from Investment on December 31, 2015
P 56,000
31. a downstream transaction (refer also to consolidation for corollary analysis)
Gross Profit Markup: P36,000/P90,000 =
40%
Inventory Remaining at Year-End
P20,000
x: Markup
40%
Unrealized profit in ending inventory
P 8,000
x: Ownership
30%
Intercompany Unrealized profit in ending
inventory
P 2,400
Multiple Choice Problems SME for Joint Ventures
1. a
2. a
3. a
4. a
5. c
6. a
7. a
8. a
9. c
10. a
11. a
12. c
13. a
14. a
15. b
16. c
Cost of investment in entity Z:
Purchase price..
P 28,000
Add: Transaction costs (1% x P28,000)
280
Costs.
P 28,280
Less: Fair value on December 31, 20x4................................P 15,000
Less: Costs to sell (5% x P15,000)..
750 14,250
Impairment loss..
P 14,030

17. d

18. a

No entry required only the decrease or increase in fair value is recognized to profit and
loss.
Cost of investment in entity Z:
Purchase price..
P 28,000
Add: Transaction costs (1% x P28,000)
280
Initial costs..
P 28,280
Less: SME As share of entity Zs loss for the year (25% x P20,000)......
5,000
Costs of investment, December 31, 20x4.
P23,280
Less: Fair value on December 31, 20x4.................................P 15,000
Less: Costs to sell (5% x P15,000)..
750 14,250
Impairment loss..
P 9,030

19. b

Cost of investment in entity Z. ..P 28,000


Less: Fair value on December 31, 20x4..................................................... 15,000
Decrease in fair value on December 31, 20x4P 13,000

20. a
Entity X:

Cost of investment in entity X. P 10,000


Less: Fair value on December 31, 20x4............................................... 13,000
Increase in fair value on December 31, 20x4 P 13,000

Entity Y:

Cost of investment in entity Y. P 15,000


Less: Fair value on December 31, 20x4............................................... 29,000
Increase in fair value on December 31, 20x4 P 14,000

21. d refer to paragraphs PFRSs for SMEs paragraphs 15.10 and 15.11

20x4: P101,000 because recoverable amount fair value less costs to sell of P98,000 is
less than the cost of P101,000.
20x5: P101,000 because it is less than recoverable amount.
20x6: P86,000 because recoverable amount of P86,000 is less than cost of P101,000.

22. e PFRSs for SMEs paragraphs 15.12, 15.14 and 15.15

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