On January 1, 2010, AyalaCorporation acquired 80% of ordinaryshares of Globe Company at fair valueof net assets acquired. All assets ofGlobe company are fairly valuedexcept for a blue office equipmentwith book value of P2,100,000 andfair value of P1,400,000. On June 30,2010, Globe Company sold the saidblue office equipment to AyalaCorporation at a selling price ofP3,000,000. On June 30, 2010, theremaining useful life of the blueequipment is 3 years. On October 1,2010, Ayala Corporation sold a 2year-old red office equipment toGlobe Company for P2,800,000 at again of P400,000. On October 1,2010, the remaining useful life of thered equipment is 4 years.What is the consolidated book valueof equipment on December 31, 2010,respectively?

The accounting approach used to allocate expenditures over the useful life of a tangible or physical…

On January 1, 2010, Ayala Corporation acquired 80% of ordinary hares of Globe Company at fair value of net assets acquired. All assets of Globe company are fairly valued xcept for a blue office equipment with book value of P2,100,000 and air value of P1,400,000. On June 30, 2010, Globe Company sold the said lue office equipment to Ayala Corporation at a selling price of 3,000,000. On June 30, 2010, the emaining useful life of the blue quipment is 3 years. On October 1.

On January 1, 2010, Ayala Corporation acquired 80% of ordinary hares of Globe Company at fair value of net assets acquired. All assets of Globe company are fairly valued xcept for a blue office equipment with book value of P2,100,000 and air value of P1,400,000. On June 30, 2010, Globe Company sold the said lue office equipment to Ayala Corporation at a selling price of 3,000,000. On June 30, 2010, the emaining useful life of the blue quipment is 3 years. On October 1.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

On January 1, 2010, Ayala
Corporation acquired 80% of ordinary
shares of Globe Company at fair value
of net assets acquired. All assets of
Globe 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, Globe Company sold the said
blue office equipment to Ayala
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, Ayala Corporation sold a 2
year-old red office equipment to
Globe 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?

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