LALA Inc. owns 80% of outstanding stocks of LILI Company purchased at book value. During the year 2016, the following transactionsOn July 1, 2016, LALA sold equipment, carried in its books at P108,000, to LILI for P126,000 cash. This equipment was acquired by LALA last July 1, 2015 for P120,000.On August 30, 2016, LALA Inc. acquired the furniture of LILI Company for P250,000 in cash. This was carried in the books of LILI at P265,000. Useful life of this furniture at the time of sale was five years.On November 8, 2016, LILI sold land to LALA which earned it P235,000 The land was reported in the books of LILI at P835,000.Net income presented in the books of LALA and LILI amounted to P820,000 and P350,250, respectively.For intercompany sale in July, how much will be the adjustment on equipment net account balance in the December 31, 2016 consolidated financial statements? Increase (Decrease)

A company that has significant influence in another company’s voting stock is known as the…

Answered: d the furniture of LILI Company for…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 25E

See similar textbooks

Related questions

Question

100%

LALA Inc. owns 80% of outstanding stocks of LILI Company purchased at book value. During the year 2016, the following transactions

On July 1, 2016, LALA sold equipment, carried in its books at P108,000, to LILI for P126,000 cash. This equipment was acquired by LALA last July 1, 2015 for P120,000.
On August 30, 2016, LALA Inc. acquired the furniture of LILI Company for P250,000 in cash. This was carried in the books of LILI at P265,000. Useful life of this furniture at the time of sale was five years.
On November 8, 2016, LILI sold land to LALA which earned it P235,000 The land was reported in the books of LILI at P835,000.
Net income presented in the books of LALA and LILI amounted to P820,000 and P350,250, respectively.

For intercompany sale in July, how much will be the adjustment on equipment net account balance in the December 31, 2016 consolidated financial statements? Increase (Decrease)

Expert Solution

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

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.

Similar questions