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 depreciation expense of equipment for the year ended December 31, 2010 O 1,200,000 1,000,000 O 1,300,000 O 1,100,000

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 depreciation expense of equipment for the year ended December 31, 2010 O 1,200,000 1,000,000 O 1,300,000 O 1,100,000

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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