Let’s Analyze

Activity 1. Solve the following problems and encircle your final answer.

1. Falcon Corporation sold equipment to its 80%-owned subsidiary, Rodent Corp., on January 1, 2020.
Falcon sold the equipment for P110,000 when its book value was P85,000 and it had a 5-year remaining
useful life with no expected salvage value. Separate balance sheets for Falcon and Rodent included the
following and accumulated depreciation amounts on December 31 2020:
Falcon Rodent
Equipment 750,000 300,000
Less: Accumulated Depreciation (200,000) (50,000)
Equipment – net 550,000 250,000

Consolidated amounts for equipment and accumulated depreciation of December 31, 2020 were,
respectively:

2. On January 1, 2020, Poe Corp. sold a machine for P900,000 to Saxe Corp., its wholly owned subsidiary.
Poe paid P1,100,000 for this machine. On the sale date, accumulated depreciation was P250,000. Poe
estimated a P100,000 salvage value and depreciated the machine on the straight-line method over 20
years, a policy that Saxe continued. In Poe's December 31, 2020, consolidated balance sheet machine
should be included in cost and accumulated depreciation as

On January 1, 2018, Shrimp Company purchased a delivery truck with an expected useful life of five
years. On January 1, 2020, Shrimp sold the truck to Planet Corp and recorded the following journal
entry:
Cash 50,000
Accumulated Depreciation 18,000
Truck 53,000
Gain on sale of truck 15,000

Planet holds 60% of Shrimp. Shrimp reported net income of P55,000 in 2020 and Planet's separate net
income (excluding interest in Shrimp) for 2020 was P98,000.

3. In the consolidation working papers, the Truck accounts was:

4. Controlling interest in consolidated net income for 2020 was:

5. The noncontrolling interest in consolidated net income for 2020 was: