Question
Belgium Ltd is the parent of France Ltd. On 1 January 20X3 Belgium sold a plant to France for $120,000. The plant had cost Belgium
Belgium Ltd is the parent of France Ltd. On 1 January 20X3 Belgium sold a plant to France for $120,000. The plant had cost Belgium $100,000 on 1 January 20X1 and had been depreciated 10% per annum straight line with no scrap value. France recalculated the depreciation for the remaining useful life and based the calculation on the transfer sale price. Both companies use the cost model. Which is the correct set of consolidation elimination entries for 31 December 20X4 in respect of the plant? Select one: A. Accounts Debit $ Credit $ Retained profits 40,000 Depreciation expense 10,000 Accumulated depreciation 10,000 Plant 20,000 . B. Accounts Debit $ Credit $ Retained profits 35,000 Depreciation expense 5,000 Accumulated depreciation 10,000 Plant 20,000 . C. Accounts Debit $ Credit $ Retained profits 35,000 Accumulated depreciation 15,000 Plant 20,000 D. Accounts Debit $ Credit $ Retained profits 35,000 Plant 20,000 Accumulated depreciation 55,000
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