Problem 5 On January 1, 2021, Pe Inc. purchased Ra Corp. for P1,500,000 for 100% ownership of its common stocks. An P80,000 excess was identified in the purchase price, which was attributable to an equipment with a net book value of P400,000 and remaining useful life of 8 years as of date. On December 31, 2022, the equipment identified at acquisition date that was attributed to the excess was sold to an unrelated party for P400,000. How much gain from the sale of equipment must be reported in the consolidated income statement of Pe and Ra?
Problem 5 On January 1, 2021, Pe Inc. purchased Ra Corp. for P1,500,000 for 100% ownership of its common stocks. An P80,000 excess was identified in the purchase price, which was attributable to an equipment with a net book value of P400,000 and remaining useful life of 8 years as of date. On December 31, 2022, the equipment identified at acquisition date that was attributed to the excess was sold to an unrelated party for P400,000. How much gain from the sale of equipment must be reported in the consolidated income statement of Pe and Ra?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 17P
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
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
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning