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Panther Co owns 80% of Tiger Co. An extract from the companies’ individual statements of financial position as at 30 June 20X8 shows the following:
Panther Co
($) Tiger Co
($)
Property, plant and equipment (carrying amount) 370,000 285,000On 1 July 20X7, Panther Co sold a piece of equipment which had a carrying amount of $70,000 to Tiger Co for $150,000. The equipment had an estimated remaining life of five years when sold.
What is the carrying amount of property, plant and equipment in the consolidated statement of financial position of Panther Co as at 30 June 20X8 (to the nearest $’000)?
Sir the answer has to be 370k of Panther+ 285k of Tiger less the profit on sale of 80k right?
Which equals to 580kThanks.
Hi,
You are partly right in your answer regarding the removal of the profit on disposal, but you have omitted the difference in the depreciation charged. We have now charged more depreciation on the higher value of the asset compared to what we would have charged if held at the original carrying value.
Thanks,
Chris
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