Reference no: EM132779323

Atkinsons, Inc. acquires all of the outstanding stock of Tedy Corporation on January 1, 2019. At the date, Tedy owns only three assets and has no liabilities:

                                           Book Value             Fair Value

Inventory                        P 40,000                 P 50,000
Equipment (10-year life)      80,000                       75,000
Building (20-year life)            200,000                   300,000

Problem 1. If Atkinsons pays P450,000 in cash for Tedy, what amount would be presented as the subsidiary's Building in a consolidation at December 31, 2021, assuming the book value at that date is still P200,000?

Problem 2. If Atkinsons pays P400,000 in cash for Tedy, what amount would be presented as the subsidiary's Building in a consolidation at December 31, 2021, assuming the book value at that date is still P200,000?

Problem 3. If Atkinsons pays P450,000 in cash for Tedy, what amount would be presented as the subsidiary's Equipment in a consolidation at December 31, 2021, assuming the book value at that date is still P80,000?

Problem 4. If Atkinsons pays P450,000 in cash for Tedy, what allocation should be assigned to the subsidiary's Equipment in preparing for consolidation at December 31, 2021, assuming the book value at that date is still P80,000?