On January 2, 20X1, Entity X purchases 75% of the common stock of Entity Y for P250,000. Entity Y hasP200,000 and P50,000 common stock and retained earnings, respectively. On December 31, 20X1, PC soldequipment to SC for P80,000. The equipment generally cost PC P120,000 when purchased four (4) years ago.Moreover, it is depreciated over its life of 10 years using the straight-line method with no residual value. Thecompanies have the following data for years 20X1 and 20X2:Entity XItems20X120X2Dividends PaidComprehensive Income from Own OperationP38,000147,000P60,000159,000Entity YItems20X120X2P22,50050,000Dividends Paid to XComprehensive Income from Own OperationP31,50074,000Required:1. Prepare the necessary journal and elimination entries that should be made in 20X1 and 20X2 about thesale of equipment. Follow the steps in the handout.2. Allocate the consolidated comprehensive income for each year.

On January 2, 20X1, Entity X purchases 75% of the common stock of Entity Y for P250,000. Entity Y has P200,000 and P50,000 common stock and retained earnings, respectively. On December 31, 20X1, PC sold equipment to SC for P80,000. The equipment generally cost PC P120,000 when purchased four (4) years ago. Moreover, it is depreciated over its life of 10 years using the straight-line method with no residual value. The companies have the following data for years 20X1 and 20X2:

On January 2, 20X1, Entity X purchases 75% of the common stock of Entity Y for P250,000. Entity Y has P200,000 and P50,000 common stock and retained earnings, respectively. On December 31, 20X1, PC sold equipment to SC for P80,000. The equipment generally cost PC P120,000 when purchased four (4) years ago. Moreover, it is depreciated over its life of 10 years using the straight-line method with no residual value. The companies have the following data for years 20X1 and 20X2:

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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