On January 1, 2020, Lilo Company purchased 90% equity of Stitch Company. On January 3, 2020, Stitch sold equipment (with original cost of P750,000 and carrying cost of P375,000) to Lilo for P540,000. The equipment have a remaining life of three (3) years and was depreciated using the straight-line method by both companies. In Lilo consolidated balance sheet as of December 31, 2020, the cost accumulated depreciation and book value should be reported at: COST: P750,000 ; ACCUMLATED DEPRECIATION P500,000; NET BOOK VALUE P375,000 COST: P375,000 ; ACCUMLATED DEPRECIATION P375,000; NET BOOK VALUE P0 COST: P750,000 ; ACCUMLATED DEPRECIATION P500,000; NET BOOK VALUE P250,000 COST: P750,000 ; ACCUMLATED DEPRECIATION P750,000; NET BOOK VALUE P0
On January 1, 2020, Lilo Company purchased 90% equity of Stitch Company. On January 3, 2020, Stitch sold equipment (with original cost of P750,000 and carrying cost of P375,000) to Lilo for P540,000. The equipment have a remaining life of three (3) years and was depreciated using the straight-line method by both companies. In Lilo consolidated balance sheet as of December 31, 2020, the cost accumulated depreciation and book value should be reported at: COST: P750,000 ; ACCUMLATED DEPRECIATION P500,000; NET BOOK VALUE P375,000 COST: P375,000 ; ACCUMLATED DEPRECIATION P375,000; NET BOOK VALUE P0 COST: P750,000 ; ACCUMLATED DEPRECIATION P500,000; NET BOOK VALUE P250,000 COST: P750,000 ; ACCUMLATED DEPRECIATION P750,000; NET BOOK VALUE P0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
On January 1, 2020, Lilo Company purchased 90% equity of Stitch Company. On January 3, 2020, Stitch sold equipment (with original cost of P750,000 and carrying cost of P375,000) to Lilo for P540,000. The equipment have a remaining life of three (3) years and was depreciated using the straight-line method by both companies. In Lilo consolidated balance sheet as of December 31, 2020, the cost accumulated depreciation and book value should be reported at:
COST: P750,000 ; ACCUMLATED DEPRECIATION P500,000; NET BOOK VALUE P375,000
COST: P375,000 ; ACCUMLATED DEPRECIATION P375,000; NET BOOK VALUE P0
COST: P750,000 ; ACCUMLATED DEPRECIATION P500,000; NET BOOK VALUE P250,000
COST: P750,000 ; ACCUMLATED DEPRECIATION P750,000; NET BOOK VALUE P0
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education