Question
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
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:
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| A. | Gain on sale of equipment for $500,000 |
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| B. | Equipment, net of accumulated depreciation for $450,000 |
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| C. | Accumulated depreciation for $50,000 |
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| D. | Depreciation expense for $150,000 |
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Fundamental Accounting Principles Volume 2
Authors: Kermit Larson, Heidi Dieckmann
15th Canadian Edition
1259087360, 9781259087363
