Reference no: EM132967431
On January 1, 2019, Gold Company purchased a computer with an expected economic life of five years. On January 1, 2021, Gold sold the computer to TLK Corporation and recorded the following entry:
Cash............................................................................................. 39,000
Accumulated depreciation................................................................ 16,000
Computer equipment.................................................................... 40,000
Gain on sale of equipment................................................................ 15,000
TLK Corporation holds 60 percent of Gold's voting shares. Gold reported net income of P45,000, and TLK reported income from its own operations of P85,000 for 2014. There is no change in the estimated life of the equipment as a result of the inter-corporate transfer.
Problem 1: In the preparation of the 2021 consolidated income statement, depreciation expense will be:
a. Debited for P5,000 in eliminating entries
b. Credited for P5,000 in the eliminating entries
c. Debited for P13,000 in the eliminating entries
d. Credited for P13,000 in the eliminating entries
Problem 2: In the preparation of the 2021 consolidated balance sheet, the computer equipment will be:
a. Debited for P1,000 c. Credited for P24,000
b. Debited for P15,000 d. Debited for P40,000
Problem 3: The income assigned to the non-controlling interest in the 2021 consolidated income statement will be:
Problem 4: The consolidated net income for 2021 will be