On January 1, 20x1, Bright Co. acquired 75% interest in Dull Co. for P180,000. On this date, the carrying amount of Dull's net identifiable assets was P160,000, equal to fair value. Noncontrolling interest was measured using the proportionate share method. The financial statements of the entities on December 31, 20x1 show the following information: 122 Bright Co. Dull Co. ASSETS Investment in Subsidiary (at cost) 180,000 0 Equipment-net 400,000 190,000 Other assets 200,000 45,000 TOTAL ASSETS 780,000 235,000 LIABITIES AND EQUITY Liabilities 70,000 25,000 Share Capital 600,000 100,000 Retained Earnings 110,000 110,000 Total equity 710,000 210,000 TOTAL LIABILITIES 780,000 235,000 Bright Co. Dull Co. Revenues 300,000 80,000 Depreciation Expense (40,000) (12,000) Other Expenses (32,000) (18,000) Gain on sale of equipment 12,000 0 Profit for the year 240,000 50,000 Additional information: ? No dividends were declared by either entity during 20x1. There is also no impairment of goodwill. ? However, on January 1, 20x1, right after the business combination, Bright Co. sold equipment with historical cost of P120,000 and accumulated depreciation of P72,000 to Dull Co. for P60,000. Bright Co. had been depreciating this equipment over a useful life of 10 years using the straight-line method. Dull Co. decided to continue this accounting policy and depreciate the equipment over its remaining useful life of 4 years. Requirement: 123 a. What is the carrying amount of the equipment sod by Bright Co. to Dull Co. in the consolidated financial statements? b. How much is the consolidated Equipment - net? c. How much is the consolidated Depreciation expense?

C. ending inventory Intercompany sale of PPE 2. On January 1, 20x1, Bright Co. acquired 75% interest in Dull Co. for P180,000. On this date, the carrying amount of Dull's net identifiable assets was P160,000, equal to fair value. Non- controlling interest was measured using the proportionate share method. The financial statements of the entities on December 31, 20x1 show the following information: Bright Co. Dull Co. ASSETS Investment in subsidiary (at cost) 180,000 Equipment - net 400,000 190,000 Other assets 200,000 45,000 TOTAL ASSETS 780,000 235,000 LIABILITIES AND EQUITY Liabilities 70,000 25,000 Share capital 600,000 100,000 Retained earnings 110,000 110,000 Total equity 710,000 210,000 TOTAL LIABILITIES AND EQUITY 780,000 235,000 Bright Co. Dull Co. Revenues 300,000 80,000 Depreciation expense (40,000) (12,000) Other expenses (32,000) (18,000)232 Chapter 5 Gain on sale of equipment 12,000 Profit for the year 240,000 50,000 Additional information: . No dividends were declared by either entity during 20x1 There is also no impairment of goodwill. However, on January 1, 20x1, right after the business combination, Bright Co. sold equipment with historical cost of P120,000 and accumulated depreciation of P72,000 to Dull Co. for P60,000. Bright Co. has been depreciating this equipment over a useful life of 10 years using the straight-line method. Dull Co. decided to continue this accounting policy and depreciate the equipment over its remaining useful life of 4 years. Requirement: a. What is the carrying amount of the equipment sold by Bright Co. to Dull Co. in the consolidated financial statements? b. How much is the consolidated 'Equipment -net"? c. How much is the consolidated 'Depreciation expense'? d. Prepare a draft of the December 31, 20x1 consolidated statements of financial position and consolidated statement of profit or loss. Intercompany dividends