Stern Manufacturing purchased an ultrasound drilling machine with a remaining economic life of 10 years 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 Manufacturing:

\section*{Required}
Give the workpaper 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.

Transcribed Image Text:

Cash 360.000 Accumulated Depreciation 150,000 Equipment 450,000 Gain on Sale of Equipment 60.000