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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
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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
Transcribed Image Text: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 book value of equipment on December 31, 2010, respectively? O 3,750,000 O 5,125,000 O 3,875,000 3,250,000
Transcribed Image Text: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? O 3,750,000 O 5,125,000 O 3,875,000 3,250,000
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