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35. Preparing the [] consolidation entries for sale of depreciable assets-Equity method Assume on January 1,2019 , a parent sells to its wholly owned subsidiary,
35. Preparing the [] consolidation entries for sale of depreciable assets-Equity method Assume on January 1,2019 , a parent sells to its wholly owned subsidiary, for a sale price of $243,000, equipment that originally cost $276,000. The parent originally purchased the equipment on January 1 , 2015 , and depreciated the equipment assuming a 10-year useful life (straight-line with no salvage value). The subsidiary has adopted the parent's depreciation policy and depreciates the equipment over the remaining useful life of 6 years. The parent uses the equity method to account for its Equity Investment. a. Compute the annual pre-consolidation depreciation expense for the subsidiary (postintercompany sale) and the parent (pre-intercompany sale). b. Compute the pre-consolidation Gain on Sale recognized by the parent during 2019. c. Prepare the required [I] consolidation entry in 2019. (Assume a full year of depreciation.) d. Prepare the required [I] consolidation entry in 2022 (assuming the subsidiary is still holding the equipment). e. How long must we continue to make the [] consolidation entries
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