At the beginning of 2019, a subsidiary sells equipment with a book value of $400,000 to its parent for $500,000. At the time of the sale, the equipment had a remaining life of 5 years, straight-line. The parent sold the equipment to an outside buyer for $470,000 at the end of 2020 (2 years later). The consolidation eliminating entry needed to consolidate the accounts of the parent and subsidiary at the end of 2020 has what effect?

	A.	Reduce equipment (net) by $80,000
	B.	Increase gain on sale by $60,000
	C.	Increase investment in subsidiary by $100,000
	D.	Decrease depreciation expense by $40,000

At the beginning of the current year, the parent sold new equipment for which it paid $1,000,000 to its subsidiary for $1,500,000. The parent had not recorded any depreciation on the equipment. The equipment had a remaining life of 10 years at that time, straight-line. The subsidiary still has the equipment at year-end. On the consolidation working paper, the net effect of eliminations (I) will be to credit:

	A.	Gain on sale of equipment for $500,000
	B.	Depreciation expense for $150,000
	C.	Accumulated depreciation for $50,000
	D.	Equipment, net of accumulated depreciation for $450,000

IFRS allows an alternative method for valuing the acquired subsidiary's goodwill. When is U.S. GAAP and IFRS valuation of goodwill the same regardless of which valuation method is used under IFRS?

	A.	There is no noncontrolling interest in the acquired subsidiary.
	B.	It is the date of acquisition.
	C.	There are no revaluations of the acquired subsidiary's identifiable net assets.
	D.	There is no goodwill impairment.