Concept Introduction:
Depreciation is referred to as the process of reduction in the value of assets due to normal usage over time. It is non-cash expense for the company.
Requirement 1
To Calculate: the depreciation expense on building reported by “P”.
b.
Concept Introduction:
Depreciation
Depreciation is referred to as the process of reduction in the value of assets due to normal usage over time. It is non-cash expense for the company.
Requirement 2
To Calculate: the depreciation expense on building reported by “S”.
c.
Concept Introduction:
Elimination Entries
Eliminating entries are required to pass when investment and other holdings are eliminating in some cases. It is the
Requirement 3
ToPrepare: the elimination entry for completing consolidated financial statement.
d.
Concept Introduction:
Requirement 4
Non-Controlling Interest
Non-controlling interest is held by subsidiary company. It is also known as minority interest. Subsidiary company is considered as the company that is owned or influenced by a holding company.
To calculate: The income assign to non-controlling interest.
e.
Concept Introduction:
Non-Controlling Interest
Non-controlling interest is held by subsidiary company. It is also known as minority interest. Subsidiary company is considered as the company that is owned or influenced by a holding company.
Requirement 5
To Calculate:the income assign to non-controlling interest.
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Advanced Financial Accounting
- On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an estimated life of 20 years and an estimated residual value of 20,000. The company has been depreciating the building using straight-line depreciation. At the beginning of 2020, the following independent situations occur: a. The company estimates that the building has a remaining life of 10 years (for a total of 16 years). b. The company changes to the sum-of-the-years-digits method. c. The company discovers that it had ignored the estimated residual value in the computation of the annual depreciation each year. Required: For each of the independent situations, prepare all journal entries related to the building for 2020. Ignore income taxes.arrow_forwardBliss Company owns an asset with an estimated life of 15 years and an estimated residual value of zero. Bliss uses the straight -line method of depreciation. At the beginning of the sixth year, the assets book value is 200,000 and Bliss changes the estimate of the assets life to 25 years, so that 20 years now remain in the assets life. Explain how this change will be accounted for in Blisss financial statements, and compute the current and future annual depreciation expense.arrow_forwardPit Coporation owns 75% of Stop Company's outstanding common stock. On 01/01/21, Pit sold sold a used piece of equipment to Stop in exchange for $236,000 cash. Pit's original cost of the equipment was $728,000 and accumulated depreciaiton of 01/01/21 was $447,000. The remaining useful life of the equipment is 10 years, and Stop will use that same usefull life. Both companies use the straight line method of depreciation. The Year-End Consolidated Financial Statements would include: Consolidated Loss on Sale in the amount of: $______________ Consolidated Depreciation Expense in the amount of $____________ Consolidated Equipment in the amount of $_______________ Consolidated Accumulated Depreciation in the amount of $__________arrow_forward
- Prime Corp acquired 90% of the outstanding ordinary share of Bee Company. On March 31, 2030, Prime sold equipment to Bee Company costing P150,000, with accumulated depreciation of P30,000 for P100,000. The remaining useful life of the equipment is four years. On September 30, 2030, Bee sold machinery with carrying amount of P200,000 for P240,000. The remaining useful life of the machine is five years. On December 31, 2030, Prime and Bee reported net income from their own operation amounting to P1,000,000 and P600,000, respectively. Bee also paid dividend of P200,000. What is the amount of non-controlling interest in net income for 2030? What is the amount of consolidated net income attributable to parent for 2030? What is the amount of Investment income under equity method for 2030?arrow_forwardPrime Corp acquired 90% of the outstanding ordinary share of Bee Company. On March 31, 2030, Prime sold equipment to Bee Company costing P150,000, with accumulated depreciation of P30,000 for P100,000. The remaining useful life of the equipment is four years. On September 30, 2030, Bee sold machinery with carrying amount of P200,000 for P240,000. The remaining useful life of the machine is five years. On December 31, 2030, Prime and Bee reported net income from their own operation amounting to P1,000,000 and P600,000, respectively. Bee also paid dividend of P200,000. What is the amount of consolidated net income attributable to parent for 2030? Group of answer choices 1,516,625 1,522,050 1,520,425 1,342,050arrow_forwardDarlene Company acquires 80% of Juanito Company for P250,000 on January 1, 2010. Juanito reported common stock of P150,000 and retained earnings of P100,000 on that date. Equipment was undervalued by P15,000 and buildings were undervalued by P20,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired. Juanito earn income and pays dividends as follows: 2010 2011 2012 Net income P 50,000 P 60,000 P 65,000 Dividends 20,000 25,000 30,000 Assume the initial value method (or cost method) is applied. 5.) Compute Darlene’s Investment in Juanito at December 31, 2010. A. P250,000 B.P271,200 C.P287,200 D.P312,500 6.) Using the same information above, compute…arrow_forward
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