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How much will be the adjustment on equipment net account

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Reference no: EM133187004

Question - BABA Inc. owns 90% of outstanding stocks of BIBI Company purchased at book value. During the year 2016, the following transactions

On April 2, 2016, BABA sold equipment, carried in its books at P108,000, to BIBI for P126,000 cash. This equipment was acquired by BABA last April 2, 2015 for P120,000.

On June 1, 2016, BABA Inc. acquired the furniture of BIBI Company for P250,000 in cash. This was carried in the books of BIBI at P265,000. Useful life of this furniture at the time of sale was five years.

On November 8, 2016,BIBI sold land to BABA which earned it P235,000 gain. The land was reported in the books of BIBI at P835,000.

Net income presented in the books of BABA and BIBI amounted to P820,000 and P350,000, respectively.

Required -

For inter-company sale in April, how much will be the adjustment on equipment net account balance in the consolidated financial statements?

How much is the adjustment on the furniture net account balance in the consolidated financial statements?

Reference no: EM133187004

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