On January 1, 2010, A Corporation acquired 80% of ordinary shares of G Company at fair value of net assets acquired. All assets of G company are fairly valued except for a blue office equipment with book value of P2,100,000 and fair value of P1,400,000. On June 30, 2010, G Company sold the said blue office equipment to A Corporation at a selling price of P3,000,000. On June 30, 2010, the remaining useful life of the blue equipment is 3 years. On October 1, 2010, A Corporation sold a 2-year-old red office equipment to G Company for P2,800,000 at a gain of P400,000. On October 1, 2010, the remaining useful life of the red equipment is 4 years. What is the consolidated book value of equipment on December 31, 2010, respectively?
On January 1, 2010, A Corporation acquired 80% of ordinary shares of G Company at fair value of net assets acquired. All assets of G company are fairly valued except for a blue office equipment with book value of P2,100,000 and fair value of P1,400,000. On June 30, 2010, G Company sold the said blue office equipment to A Corporation at a selling price of P3,000,000. On June 30, 2010, the remaining useful life of the blue equipment is 3 years. On October 1, 2010, A Corporation sold a 2-year-old red office equipment to G Company for P2,800,000 at a gain of P400,000. On October 1, 2010, the remaining useful life of the red equipment is 4 years.
What is the consolidated book value of equipment on December 31, 2010, respectively?
Ans. 3,250,000 (Show solution)
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