Problem

Transfer of Asset from One Subsidiary to AnotherPelts Company holds a total of 70 percent...

Transfer of Asset from One Subsidiary to Another

Pelts Company holds a total of 70 percent of Bugle Corporation and 80 percent of Cook Products Corporation stock. Bugle purchased a warehouse with an expected life of 20 years on January 1, 20X1, for $40,000. On January 1, 20X6, it sold the warehouse to Cook Products for $45,000.

Required

Complete the following table showing selected information that would appear in the separate 20X6 income statements and balance sheets of Bugle Corporation and Cook Products Corporation and in the 20X6 consolidated financial statements.

 

Bugle Corporation

Cook Products Corporation

Consolidated Entity

Depreciation expense

 

 

 

Fixed assets—warehouse

 

 

 

Accumulated depreciation

 

 

 

Gain on sale of warehouse

 

 

 

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