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2. Intercompany equipment sale (20 points) On Jan 2, 2020, a subsidiary sells to its parent...
3-During 2020, Parent sells land to Subsidiary for $226,800. The land had a book value of...
3-During 2020, Parent sells land to Subsidiary for $226,800. The land had a book value of $159,000. The land is then sold to an unaffiliated party for $303,000 in 2024. Required: a. Prepare the consolidation entry related to the land sale for 2020. b. Prepare the consolidation entry related to the land sale for 2021. c. Prepare the consolidation entry related to the land for 2024. d. What will be the gain on sale on the 2024 consolidated income statement?...
question 2 Question 5 2-On Jan 2, 2020, Parent sells to its wholly owned investee equipment...
question 2
Question 5
2-On Jan 2, 2020, Parent sells to its wholly owned investee equipment that had cost $250,000. The selling price was $180,000 and accumulated depreciation on that date was $75,000. The subsidiary depreciates the equipment over its remaining life of 10 years. Required: a. Compute the difference between the annual depreciation expense when Parent owned the equipment and depreciation expense recorded by the subsidiary. b. Compute the gain on sale recorded by the parent. c. Prepare the...
Question text Preparing the [I] consolidation journal entries for sale of depreciable assets - Equity method...
Question text
Preparing the
[I] consolidation journal entries for sale of depreciable
assets - Equity method
Assume that on January 1, 2011, a wholly owned subsidiary sells to
its parent, for a sale price of $132,000, equipment that originally
cost $156,000. The subsidiary originally purchased the equipment on
January 1, 2007, and depreciated the equipment assuming a 10-year
useful life (straight-line with no salvage value). The parent has
adopted the subsidiary's depreciation policy and depreciates the
equipment over the remaining...
Intercompany Transactions – Equity Method 60 points Parent purchased 100% of a Subsidiary on January 1,...
Intercompany Transactions – Equity Method 60 points Parent purchased 100% of a Subsidiary on January 1, 2020. The excess of investment cost over book value of $350,000 was allocated entirely to a 7-year royalty agreement. The parent uses the equity method to account for its investment in its subsidiary. In 2021, Subsidiary sold to Parent land having a book value of $90,000 for a total price of $244,000. On January 2, 2022, Parent sold equipment to Subsidiary for $120,000. The...
Prepare consolidation spreadsheet for intercompany sale of equipment- Equity Method Assume a parent company acquired its...
Prepare consolidation spreadsheet for intercompany sale of equipment- Equity Method Assume a parent company acquired its subsidiary on January 1, 2015, at a purchase price that was $222,000 in excess of the book value of the subsidiary's Stockholders' Equity on the acquisition date. Of that excess, $132,000 was assigned to a Customer List that is being amortized over a 10-year period. The remaining $90,000 was assigned to Goodwill. In January of 2018, the wholly owned subsidiary sold Equipment to the...
Prepare consolidation spreadsheet for intercompany sale of equipment - Equity method Assume a parent company acquired...
Prepare consolidation spreadsheet for intercompany sale
of equipment - Equity method
Assume a parent company acquired its subsidiary on January 1, 2015,
at a purchase price that was $222,000 in excess of the book value
of the subsidiary’s Stockholders’ Equity on the acquisition date.
Of that excess, $132,000 was assigned to a Customer List that is
being amortized over a 10-year period. The remaining $90,000 was
assigned to Goodwill.
In January of 2018, the wholly owned subsidiary sold Equipment
to...
50. Prepare consolidation spreadsheet for intercompany sale of equipment-Equity method Assume a parent company acquired its...
50. Prepare consolidation spreadsheet for intercompany sale of
equipment-Equity method Assume a parent company acquired its
subsidiary on January 1, 2015, at a purchase price that was
$222,000 in excess of the book value of the subsidiary's
Stockholders' Equity on the acquisition date. Of that excess,
$132,000 was assigned to a Customer List that is being amortized
over a 10-year period. The remaining $90,000 was assigned to
Goodwill. In January of 2018, the wholly owned subsidiary sold
Equipment to the...
At the beginning of 2019, a subsidiary sells equipment with a book value of $400,000 to...
At the beginning of 2019, a subsidiary sells equipment with a book value of $400,000 to its parent for $500,000. At the time of the sale, the equipment had a remaining life of 5 years, straight-line. The parent sold the equipment to an outside buyer for $470,000 at the end of 2020 (2 years later). The consolidation eliminating entry needed to consolidate the accounts of the parent and subsidiary at the end of 2020 has what effect? A. Increase gain...
At the beginning of 2019, a parent sells equipment with a book value of $400,000 to...
At the beginning of 2019, a parent sells equipment with a book value of $400,000 to its subsidiary for $500,000. At the time of the sale, the equipment had a remaining life of 5 years, straight-line. The subsidiary sold the equipment to an outside buyer for $470,000 at the end of 2021 (3 years later). The consolidation eliminating entry needed to consolidate the accounts of the parent and subsidiary at the end of 2021 has what effect? A. Increase investment...
3. Intercompany sales of inventory (20 points) Parent Co. acquired 100% of Sub, Inc. on January...
3. Intercompany sales of inventory (20 points) Parent Co. acquired 100% of Sub, Inc. on January 1, 2021. During 2021, Parent sold goods to Sub for $260,000 that cost Parent $170,000. Sub still owned 30% of the goods at the end of the year. In their pre-consolidation books, cost of goods sold was $1,050,000 for Parent and $375,000 for Sub. a. Prepare all consolidation entries related to inventory and cost of goods sold for 2021. b. Compute consolidated cost of...
3-During 2020, Parent sells land to Subsidiary for $226,800. The land had a book value of $159,000. The land is then sold to an unaffiliated party for $303,000 in 2024. Required: a. Prepare the consolidation entry related to the land sale for 2020. b. Prepare the consolidation entry related to the land sale for 2021. c. Prepare the consolidation entry related to the land for 2024. d. What will be the gain on sale on the 2024 consolidated income statement?...
question 2
Question 5
2-On Jan 2, 2020, Parent sells to its wholly owned investee equipment that had cost $250,000. The selling price was $180,000 and accumulated depreciation on that date was $75,000. The subsidiary depreciates the equipment over its remaining life of 10 years. Required: a. Compute the difference between the annual depreciation expense when Parent owned the equipment and depreciation expense recorded by the subsidiary. b. Compute the gain on sale recorded by the parent. c. Prepare the...
Question text
Preparing the
[I] consolidation journal entries for sale of depreciable
assets - Equity method
Assume that on January 1, 2011, a wholly owned subsidiary sells to
its parent, for a sale price of $132,000, equipment that originally
cost $156,000. The subsidiary originally purchased the equipment on
January 1, 2007, and depreciated the equipment assuming a 10-year
useful life (straight-line with no salvage value). The parent has
adopted the subsidiary's depreciation policy and depreciates the
equipment over the remaining...
Prepare consolidation spreadsheet for intercompany sale
of equipment - Equity method
Assume a parent company acquired its subsidiary on January 1, 2015,
at a purchase price that was $222,000 in excess of the book value
of the subsidiary’s Stockholders’ Equity on the acquisition date.
Of that excess, $132,000 was assigned to a Customer List that is
being amortized over a 10-year period. The remaining $90,000 was
assigned to Goodwill.
In January of 2018, the wholly owned subsidiary sold Equipment
to...
50. Prepare consolidation spreadsheet for intercompany sale of
equipment-Equity method Assume a parent company acquired its
subsidiary on January 1, 2015, at a purchase price that was
$222,000 in excess of the book value of the subsidiary's
Stockholders' Equity on the acquisition date. Of that excess,
$132,000 was assigned to a Customer List that is being amortized
over a 10-year period. The remaining $90,000 was assigned to
Goodwill. In January of 2018, the wholly owned subsidiary sold
Equipment to the...
3. Intercompany sales of inventory (20 points) Parent Co. acquired 100% of Sub, Inc. on January 1, 2021. During 2021, Parent sold goods to Sub for $260,000 that cost Parent $170,000. Sub still owned 30% of the goods at the end of the year. In their pre-consolidation books, cost of goods sold was $1,050,000 for Parent and $375,000 for Sub. a. Prepare all consolidation entries related to inventory and cost of goods sold for 2021. b. Compute consolidated cost of...
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