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On January 1, 20X7, Server Company purchased a machine with an expected economic life of five...

On January 1, 20X7, Server Company purchased a machine with an expected economic life of five years. On January 1, 20X9, Server sold the machine to Patron Corporation and recorded the following entry:

Cash                                       $45,000

Accumulated Depreciation       28,000

                      Machine                                  70,000

                        Gain on sale of equipment        3,000

Patron Corporation holds 75 percent of Server's voting shares. Server reported net income of $50,000, and Patron reported income from its own operations of $100,000 for 20X9. There is no change in the estimated economic life of the equipment as a result of the intercorporate transfer. Based on the preceding information, in the preparation of the 20X9 consolidated income statement, machine will be what amount and will it be debited or credited in the consolidation entry? Show calculation

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The preparation of the 20/9 consolidated income statement Particulars $ Net income Server Company 50000 Patron Corporation 10

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