Question
Company A purchases land for $10,000 and then sells it the next day to its subsidiary, Company B, for $25,000. The land has a fair
Company A purchases land for $10,000 and then sells it the next day to its subsidiary, Company B, for $25,000. The land has a fair market value of $30,000 at the time of transfer. Subsequently, Company B sell the land to an external party for 40,000. and Company B believes it can sell it in the future for $40,000.
What would the correct consolidated journal entry be in the subsequent period to correct for the sale?Company A purchases land for $10,000 and then sells it the next day to its subsidiary, Company B, for $25,000. The land has a fair market value of $30,000 at the time of transfer. Subsequently Company B sell the land to an external party for 40,000. and Company B believes it can sell it in the future for $40,000.
Required
What would the correct consolidated journal entry be in the subsequent period to correct for the sale?
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Managerial Accounting
Authors: Karen W. Braun, Wendy M. Tietz
4th edition
978-0133428469, 013342846X, 133428370, 978-0133428377
