Playoff Corporation holds 90 percent ownership of Series Company. On July 1, 20X3, Playoff sold equipment that

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Playoff Corporation holds 90 percent ownership of Series Company. On July 1, 20X3, Playoff sold equipment that it had purchased for $30,000 on January 1, 20X1, to Series for $28,000. The equipment’s original six year estimated total economic life remains unchanged. Both companies use straight-line depreciation. The equipment’s residual value is considered negligible.


Required

a. Give the consolidation entry or entries in the consolidation worksheet prepared as of December 31, 20X3, to remove the effects of the intercompany sale.

b. Give the consolidation entry or entries in the consolidation worksheet prepared as of December 31, 20X4, to remove the effects of the intercompany sale.

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Advanced Financial Accounting

ISBN: 9781260772135

13th Edition

Authors: Theodore Christensen, David Cottrell, Cassy Budd

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