Question

Photos - Screenshot (257).png See all phalus + Add to Search > Edit & Create S hare 6 .. The Parent Company had purchased a piece of equipment for $100,000 the equipment is expected to last 10 years with no salvage. At the beginning of year 5, Parent Company sold the equipment to its wholly owned subsidiary Subbie Company for $66000. Subbie Company believes the machine will last 6 years and have no salvage. Subbie also uses straight line depreciation. At the end of year 5 what gain or loss will Parent Company show on the sale of the equipment to Subbie Company? Oloss 34000 Oo Ogain 6000 loss 6000 Question 4 (1 point) TL- n r .L- L-- -- - - -- I n nnnn IL- – ENG 8:55 PM Type here to search

Answer 1

Ans Gain $6.000 Exploration ? $100,000 cost of the Asset – Depreciation for 4 years $1,00,000 - $0 x Hyear? $ 40,000 10 years x 4 years] $ 60,000 Book value of the Sacuipment at the beginning year-5 sall value to subbie company $ 66,000 $ 6,000 Gain on sale of Ecruipment {$66.000 ~$60.0007 # subbie at the Company pinchase will record the wropment price pre., $66,000.