Question

1. Pumpkin Corporation purchased land on January 1, 20X6, for $50,000. On July 15, 20X8, it sold the land to its subsidiary, Spice Corporation, for $70,000. Pumpkin owns 80 percent of Spice's voting shares.

1. Based on the preceding information, what will be the worksheet consolidating entry to remove the effects of the intercompany sale of land in preparing the consolidated financial statements for 20X8? Consolidating entry
2. Based on the preceding information, what will be the worksheet consolidating entry to remove the effects of the intercompany sale of land in preparing the consolidated financial statements for 20X9? Consolidating entry
3. If Spice Corporation had initially purchased the land for $50,000 and then sold it to Pumpkin on July 15, 20X8, for $70,000, which worksheet consolidating entry will be made to remove the effects of the intercompany sale of land on December 31, 20X8? Consolidating entry:
4. If Spice Corporation had initially purchased the land for $50,000 and then sold it to Pumpkin on July 15, 20X8, for $70,000, which worksheet consolidating entry will be made to remove the effects of the intercompany sale of land on December 31, 20X9? Consolidating entry:

Answer 1

ANS Given Pumpkin corporation - Holding Company - 80% Spice Corporation & Subsidary Company - 20% Pumpkin Corporation purchased land for = & 50.000 pumpkin Corporation Sold land for = $ 70,000 credit / S.NO $ 20,000 Worksheet Consolidating entries Accounting titles and explanation Debit Gain on sale of land $ 20,000 Land (Remove effect of inter company Sale 2018) Investment in Spice Corporation Land (Remove effect of inter company sale - for 2014) $ 20,000 $ 16000 Investment in Spice (80% of Corporation $20,000) NCI $ 4000 IN NA of spice Corporation (20% of $ 20,000) land when pumpkin sold to spice $20,000 Entry