Question
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
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 still has the equipment at the end of 2020 (2 years later). On the consolidated financial statements for 2020, how is the equipment reported?
| A. | Book value $320,000, depreciation expense $80,000 | |
| B. | Book value $200,000, depreciation expense $100,000 | |
| C. | Book value $400,000, depreciation expense $100,000 | |
| D. | Book value $240,000, depreciation expense $80,000 |
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Accounting Principles
Authors: Jerry Weygandt, Paul Kimmel, Donald Kieso
12th edition
1119132223, 978-1-119-0944, 1118875052, 978-1119132226, 978-1118875056
