On January 1, 2020, Subsidiary Company purchased a delivery truck with an expected useful life of 5 years. On January 1, 2022, Subsidiary Company sold the truck to Parent Company and recorded the following entry: Cash 43,800 21,200 Accumulated depreciation Truck Gain on sale of truck 53,000 12,000 Parent holds 60% of Subsidiary's voting shares. Subsidiary reported net income of P55,000 and Parent reported separate net income of P98,000 for 2022. Parent Company continued the method used by Subsidiary Co. in recording the depreciation expense and the same remaining life. 1. The consolidated net income for 2022 a. P 153,000 b. P 141,000 c. P 145,000 d. P 144,000 2. Non-controlling interest in the consolidated net income a. P 18,800 b. P 17, 200 c. P 22,000 d. P 19, 200 3. Depreciation expense recorded by the parent company a. P4,000 b. P 10, 600 C.P 14,600 d. P 10, 950 4. Depreciation expense reported in the Consolidated Income Statement c. P 14,600 d. P 10, 950 a. P4,000 b. P 10, 600 5. The truck and its accumulated depreciation in the Consolidated Balance Sheet a. 43,800 and 14,600 b. 53,000 and 21,200 c. 53,000 and 31,800 d. 43,800 and 21,200

On January 1, 2020, Subsidiary Company purchased a delivery truck with an expected useful life of 5 years. On January 1, 2022, Subsidiary Company sold the truck to Parent Company and recorded the following entry: Cash 43,800 21,200 Accumulated depreciation Truck Gain on sale of truck 53,000 12,000 Parent holds 60% of Subsidiary's voting shares. Subsidiary reported net income of P55,000 and Parent reported separate net income of P98,000 for 2022. Parent Company continued the method used by Subsidiary Co. in recording the depreciation expense and the same remaining life. 1. The consolidated net income for 2022 a. P 153,000 b. P 141,000 c. P 145,000 d. P 144,000 2. Non-controlling interest in the consolidated net income a. P 18,800 b. P 17, 200 c. P 22,000 d. P 19, 200 3. Depreciation expense recorded by the parent company a. P4,000 b. P 10, 600 C.P 14,600 d. P 10, 950 4. Depreciation expense reported in the Consolidated Income Statement c. P 14,600 d. P 10, 950 a. P4,000 b. P 10, 600 5. The truck and its accumulated depreciation in the Consolidated Balance Sheet a. 43,800 and 14,600 b. 53,000 and 21,200 c. 53,000 and 31,800 d. 43,800 and 21,200

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, 2020, Subsidiary Company purchased a delivery truck with an expected useful
life of 5 years. On January 1, 2022, Subsidiary Company sold the truck to Parent Company
and recorded the following entry:
Cash
43,800
21,200
Accumulated depreciation
Truck
53,000
12,000
Gain on sale of truck
Parent holds 60% of Subsidiary's voting shares. Subsidiary reported net income of P55,000
and Parent reported separate net income of P98,000 for 2022. Parent Company continued
the method used by Subsidiary Co. in recording the depreciation expense and the same
remaining life.
1. The consolidated net income for 2022
a. P 153,000
b. P 141,000
c. P 145,000
d. P 144,000
2. Non-controlling interest in the consolidated net income
a. P 18,800
b. P 17, 200
c. P 22,000
d. P 19, 200
3. Depreciation expense recorded by the parent company
a. P4,000
b. P 10, 600
c. P 14,600
d. P 10, 950
4. Depreciation expense reported in the Consolidated Income Statement
c. P 14,600
d. P 10, 950
a. P 4,000
b. P 10, 600
5. The truck and its accumulated depreciation in the Consolidated Balance Sheet
c. 53,000 and 31,800
d. 43,800 and 21,200
a. 43,800 and 14,600
b. 53,000 and 21,200

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