Question
At the beginning of 2021, a subsidiary sells equipment with a book value of $1,500,000 to its parent for $2,000,000. The equipment has a remaining
At the beginning of 2021, a subsidiary sells equipment with a book value of $1,500,000 to its parent for $2,000,000. The equipment has a remaining life of 5 years, straight-line. At the beginning of 2024, the parent sells the equipment to an outside company for $1,800,000. At what amount should the 2023 consolidated income statement report depreciation expense, and what is the 2024 consolidated gain on sale of the equipment?
Select one:
a.
| 2023 consolidated | 2024 consolidated gain |
|---|---|
| depreciation expense | |
| $300,000 | $900,000 |
b.
| 2023 consolidated | 2024 consolidated gain |
|---|---|
| depreciation expense | |
| $100,000 | $900,000 |
c.
| 2023 consolidated | 2024 consolidated gain |
|---|---|
| depreciation expense | |
| $300,000 | $1,200,000 |
d.
| 2023 consolidated | 2024 consolidated gain |
|---|---|
| depreciation expense | |
| $100,000 | $1,200,000 |
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Principles Of External Auditing
Authors: Brenda Porter, Jon Simon, David Hatherly
1st Edition
0471962120, 978-0471962120
