The Siri Company acquired equipment on January 1, 2015 at a cost of P400,000, depreciating it over 8 years with a nil residual value. On January 1, 2018. The Triss Company acquired 100% of Siri and estimated the fair value of the equipment at P230,000 with a remaining life of 5 years. This fair value was not incorporated into Siri's books and the depreciation expense continued to be calculated by reference to original cost. What adjustments should be made to the depreciation expense for the year and the statement of financial position carrying amount in preparing the consolidated financial statements for the year ended December 31, 2019? DEPRECIATION EXPENSE -increase by P4,000 ; CARRYING AMOUNT - increased by P12,000 DEPRECIATION EXPENSE -decrease by P4,000 ; CARRYING AMOUNT - decreased by P12,000 DEPRECIATION EXPENSE -increase by P4,000 ; CARRYING AMOUNT - decreased by P12,000 DEPRECIATION EXPENSE -decreased by P4,000 ; CARRYING AMOUNT - increased by P12.000
The Siri Company acquired equipment on January 1, 2015 at a cost of P400,000, depreciating it over 8 years with a nil residual value. On January 1, 2018. The Triss Company acquired 100% of Siri and estimated the fair value of the equipment at P230,000 with a remaining life of 5 years. This fair value was not incorporated into Siri's books and the depreciation expense continued to be calculated by reference to original cost. What adjustments should be made to the depreciation expense for the year and the statement of financial position carrying amount in preparing the consolidated financial statements for the year ended December 31, 2019? DEPRECIATION EXPENSE -increase by P4,000 ; CARRYING AMOUNT - increased by P12,000 DEPRECIATION EXPENSE -decrease by P4,000 ; CARRYING AMOUNT - decreased by P12,000 DEPRECIATION EXPENSE -increase by P4,000 ; CARRYING AMOUNT - decreased by P12,000 DEPRECIATION EXPENSE -decreased by P4,000 ; CARRYING AMOUNT - increased by P12.000
Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization
Section: Chapter Questions
Problem 62P
Related questions
Question
Transcribed Image Text:The Siri Company acquired equipment on January 1, 2015 at a cost of P400,000,
depreciating it over 8 years with a nil residual value. On January 1, 2018. The Triss
Company acquired 100% of Siri and estimated the fair value of the equipment at
P230,000 with a remaining life of 5 years. This fair value was not incorporated
into Siri's books and the depreciation expense continued to be calculated by
reference to original cost. What adjustments should be made to the depreciation
expense for the year and the statement of financial position carrying amount in
preparing the consolidated financial statements for the year ended December
31, 2019?
DEPRECIATION EXPENSE -increase by P4,000 ; CARRYING AMOUNT - increased by
P12,000
DEPRECIATION EXPENSE -decrease by P4,000 ; CARRYING AMOUNT - decreased by
P12,000
DEPRECIATION EXPENSE -increase by P4,000; CARRYING AMOUNT - decreased by
P12,000
DEPRECIATION EXPENSE -decreased by P4,000 ; CARRYING AMOUNT - increased by
P12,000
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
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning