Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Pam Corporation holds 70 percent ownership of Spray Enterprises. On December 31, 20X6, Spray paid Pam $31,000 for a truck that Pam had purchased
Pam Corporation holds 70 percent ownership of Spray Enterprises. On December 31, 20X6, Spray paid Pam $31,000 for a truck that Pam had purchased for $36,000 on January 1, 20X2. The truck was considered to have a 10-year life from January 1, 20X2, and no residual value. Both companies depreciate equipment using the straight-line method. a. Prepare the worksheet consolidation entry or entries needed on December 31, 20X6, to remove the effects of the intercompany sale. Gain on Sale of truck Truck Accumulated depreciation Debit Credit b. Prepare the worksheet consolidation entry or entries needed on December 31, 20X7, to remove the effects of the intercompany sale. Investment in Spray Truck Accumulated depreciation Debit Credit Debit Credit Depreciation Expense Accumulated depreciation
Step by Step Solution
There are 3 Steps involved in it
Step: 1
a Prepare the worksheet consolidation entry or entries needed on December 31 20X6 to remove the effe...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started