On January 1, 2020, Entity A, a public entity, acquired 90% of outstanding ordinary shares of Entity B. All the assets and liabilities of Entity B are properly valued except for its only building with cost of P1,000,000 and accumulated depreciation of P100,000 without any residual value. On January 1, 2020, the building is already two years of age. The fair value of the building on January 1, 2020 is P720,000. On July 1, 2020, Entity B sold the said building to Entity A at a loss of P90,000. On December 31, 2020, what is the consolidated book value of the said building to be presented in the Consolidated Statement of Financial of Entity A? a. 680,000 b. 850,000 c. 595,000 d. 700,000
On January 1, 2020, Entity A, a public entity, acquired 90% of outstanding ordinary shares of Entity B. All the assets and liabilities of Entity B are properly valued except for its only building with cost of P1,000,000 and accumulated depreciation of P100,000 without any residual value. On January 1, 2020, the building is already two years of age. The fair value of the building on January 1, 2020 is P720,000. On July 1, 2020, Entity B sold the said building to Entity A at a loss of P90,000. On December 31, 2020, what is the consolidated book value of the said building to be presented in the Consolidated Statement of Financial of Entity A? a. 680,000 b. 850,000 c. 595,000 d. 700,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On January 1, 2020, Entity A, a public entity, acquired 90% of outstanding ordinary shares of Entity B.
All the assets and liabilities of Entity B are properly valued except for its only building with cost of
P1,000,000 and
the building is already two years of age. The fair value of the building on January 1, 2020 is P720,000. On
July 1, 2020, Entity B sold the said building to Entity A at a loss of P90,000.
On December 31, 2020, what is the consolidated book value of the said building to be presented in the
Consolidated Statement of Financial of Entity A?
a. 680,000 b. 850,000 c. 595,000 d. 700,000
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