How much is the gain on the sale

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Question - On January 1, 20x1, Pizzicato Co. acquired a machine for P20,000,000. Pizzicato Co. estimated a useful life of 10 years and a residual value of P1,000,000 and used the straight line method of depreciation. In 20x4, Pizzicato Co. changed the depreciation method to the sum-of-the-years ' digits method, and the estimates of useful life and residual value to a remaining 5-year useful life and P800,000, respectively. On July 21, 20x6, Pizzicato Co. sold the machine for P4,500,000. Pizzicato Co. incurred selling costs of P50,000. Pizzicato Co. prorates full-year depreciation on the basis of the nearest month. How much is the gain (loss) on the sale?

a. 162,237

b. (162,237)

c. 175,000

d. (175,000)

Reference no: EM132933144

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