Homework Answers
Answer:
Option b . $262,500
Explanation:
Even though Clearwater Co. owned all of the voting common stock of Kelly,Inc. the equipment, once sold must be recorded in the sale value in the books of Kelly,Inc.
:. Value of asset on January 2 2020 = $350,000
Less: Depreciation (350,000* 1/8) = $(43,750)
Value of asset on December 31 2020 = $306,250
Less: Depreciation (350,000*1/8) = $(43,750)
Value of asset on December 31,2021 = $262,500
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