P 7000 35 c P22500 x 415 P6000 36 a P50000 P50000 x 410 P30000 37 b The P39000

# P 7000 35 c p22500 x 415 p6000 36 a p50000 p50000 x

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P 7,000 35. c – (P22,500 x 4/15 = P6,000) 36. a – [P50,000 – (P50,000 x 4/10) = P30,000]

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37 . b The P39,000 paid to GG Company will be charged to depreciation expense by TLK Corporation over the remaining 3 years of ownership. As a result, TLK Corporation will debit depreciation expense for P13,000 each year. GG Company had charged P16,000 to accumulated depreciation in 2 years, for an annual rate of P8,000. Depreciation expense therefore must be reduced by P5,000 (P13,000 - P8,000) in preparing the consolidated statements. 38 . a TLK Corporation will record the purchase at P39,000, the amount it paid. GG Company had the equipment recorded at P40,000; thus, a debit of P1,000 will raise the equipment balance back to its original cost from the viewpoint of the consolidated entity. 39 . b Reported net income of GG Company P 45,000 Reported gain on sale of equipment P15,000 Intercompany profit realized in 20x6 (5,000 ) (10,000 ) Realized net income of GG Company P 35,000 Proportion of stock held by non-controlling interest x .40 Income assigned to non-controlling interests P 14,000 40 . c Operating income reported by TLK Corporation P 85,000 Net income reported by GG Company 45,000 P130,000 Less: Unrealized gain on sale of equipment (P15,000 - P5,000) (10,000 ) Consolidated net income P120,000 41. b Eliminating entries: 12/31/20x5: date of acquisition Restoration of BV and eliminate unrealized gain Equipment 10,000 Gain 150,00 0 Accumulated depreciation 160,00 0 Parent Books – Mortar Subsidiary Books – Granite Cash 390,000 Equipment 390,000 Accumulated depreciation 160,000 Cash 390,000 Equipment 400,000 Gain 150,000 Mortar Selling price P390,000 Less: Book value, 12/31/20x5 Cost, 1/1/20x2 P400,000 Less: Accumulated depreciation : P400,000/10 years x 4 years 160,000 240,00 0 Unrealized gain on sale of equipment P 150,000 Realized gain – depreciation: P150,000/6 years P
25,000 42. a – refer to No. 41 for computation 43. b - refer to No. 41 for computation 44. d Eliminating entries: 12/31/20x6: subsequent to date of acquisition Realized Gain – depreciation Accumulated depreciation 25,000 Depreciation expense 25,000 P150,000 / 6 years or P65,000 – P40,000 “Should be in CFS” Parent Books – Mortar “Recorded as” Subsidiary Books - Granite Depreciation expense (P400,000 / 10 years) 40,000 Depreciation expense (P390,000 / 6 years) 65,000 Acc. Depreciation 40,000 Acc. depreciation 65,000 45. c Eliminating entries: 12/31/20x6: subsequent to date of acquisition Equipment 10,000 Retained earnings (150,000 – 25,000) 100,00 0 Accumulated depreciation (P160,000 – P25,000) 135,00 0 46. a Total gain on the sale = P1,000,000 – (P500,000 - P150,000) = P650,000 Unconfirmed gain after three years = 2/5 x P650,000 = P260,000 47. d Depreciation to 1/1/x3 is P25,000 Depreciation expense for 20x3 and 20x4 is (P85,000 - P25,000)/6 = P10,000 per year Therefore accumulated depreciation at 12/31/x4 is P45,000. Net equipment balance is P85,000 - P45,000 = P40,000. 48. b At the end of two years, the subsidiary reports the equipment at original cost of P2,500,000 and accumulated depreciation of (P2,500,000/10) x 2 = P500,000. Depreciation expense is P250,000. The consolidated balance sheet reports the equipment at original cost of P1,000,000 and accumulated depreciation of P200,000 + ([(P1,000,000 - P200,000)/10] x 2) = P360,000.

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