Barney Company is an $80\%$ owned subsidiary Hayes Inc. During $20$X$2,$Hayes sold land to Barney for $$60,000.$ Based upon an independent appraisal of the land$$s value. The land originally cost $$40,000.$ On July $1,20$X$2,$ Barney sold machinery to Hayes for $$20,000.$ The machinery was carried on Barney$$s books at a $$30,000$ cost$,$ with accumulated depreciation of $$17,000.$ The machinery had a remaining life of $5$ years at the sale date. Both companies use the straight line method depreciation.

Instructions:

Complete the following partial worksheet for $20$X$3,$ the year subsequent to the asset sales. Key and explain all eliminations and adjustments.Hayes Inc, and Subsidiary Barney Company

Partial Worksheet

For the Year Ended December $31,20$X$8$

Trial Balance

Eliminations and Adjustments

Hayes

Barney

Dr$.$

Cr$.$

Land

$103,000$

$95,00$

Machinery

$317,000$

$190,000$

Accumulate depreciation

$(185,000)$

$(73,000)$

Retained earnings $$Hayes

$(921,000)$

Retained earnings $$ Barney

$(219,000)$

Depreciation expenses

$15,600$

$7,100$