Elimination Entries for Land Transfer
Huckster Corporation purchased land on January 1, 20X1, for $20,000. On June 10, 20X4, it sold the land to its subsidiary, Lowly Corporation, for $30,000. Huckster owns 60 percent of Lowly’s voting shares.
Required
a.Give the worksheet eliminating entries needed to remove the effects of the intercompany sale of land in preparing the consolidated financial statements for 20X4 and 20X5.
b.Give the worksheet eliminating entries needed on December 31, 20X4 and 20X5, if Lowly had initially purchased the land for $20,000 and then sold it to Huckster on June 10, 20X4, for $30,000.
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