Pop Industries manufactures heavy equipment used in construction and excavation. On January 3, 2016, Pop sold a

Question:

Pop Industries manufactures heavy equipment used in construction and excavation. On January 3, 2016, Pop sold a piece of equipment from its inventory that cost $360,000 to its 60 percent-owned subsidiary, Son Corporation, at Pop's standard price of twice its cost. Son is depreciating the equipment over six years using straight-line depreciation and no .
REQUIRED
1. Determine the net amount at which this equipment will be included in the consolidated balance sheets for Pop Industries and Subsidiary at December 31, 2016 and 2017.
2. Pop accounts for its investment in Son as a one-line consolidation. Prepare the consolidation workpaper entries related to this intercompany sale that are necessary to consolidate the of Pop and Son at December 31, 2016 and 2017.
Financial Statements
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Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...