Playoff Corporation holds 90 percent ownership of Series Company. On July 1, 20X3, Playoff sold equipment that
Question:
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.
Step by Step Answer:
Advanced Financial Accounting
ISBN: 9781260772135
13th Edition
Authors: Theodore Christensen, David Cottrell, Cassy Budd