On January 1, 20X1, P sells an equipment with P20,000 book value to its subsidiary S for P30,000. S intends to use the equipment for 4 years. On December 31, 20x2, S sells the equipment to an outside party for P14,000. What amount of gain or (loss) for sale of equipment is reported on the consolidated financial statements? A. Gain 14,000 B. Loss 6,000 C. Loss 1,000 D. Gain 4,000
On January 1, 20X1, P sells an equipment with P20,000 book value to its subsidiary S for P30,000. S intends to use the equipment for 4 years. On December 31, 20x2, S sells the equipment to an outside party for P14,000. What amount of gain or (loss) for sale of equipment is reported on the consolidated financial statements? A. Gain 14,000 B. Loss 6,000 C. Loss 1,000 D. Gain 4,000
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter7: Operating Assets
Section: Chapter Questions
Problem 11MCQ
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On January 1, 20X1, P sells an equipment with P20,000 book value to its subsidiary S for P30,000. S intends to use the equipment for 4 years. On December 31, 20x2, S sells the equipment to an outside party for P14,000. What amount of gain or (loss) for sale of equipment is reported on the consolidated financial statements?
A. Gain 14,000
B. Loss 6,000
C. Loss 1,000
D. Gain 4,000
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