Elimination Entry Computation
Stern Manufacturing purchased an ultrasound drilling machine with a remaining 10-year economic life from a 70 percent owned subsidiary for $360,000 on January 1, 20X6. Both companies use straight- line depreciation. The subsidiary recorded the following entry when it sold the machine to Stern:
Cash | 360,000 |
|
Accumulated Depreciation | 150,000 |
|
Equipment |
| 450,000 |
Gain on Sale of Equipment |
| 60,000 |
Required
Give the worksheet elimination entry or entries needed to remove the effects of the intercorporate sale of equipment when consolidated financial statements are prepared as of (a) December 31, 20X6, and (b) December 31, 20X7.
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