Course name : Advanced Financial Accounting

Peter Corp. purchased a machine on Jan 1, 2011 for $ 120,000 and estimated that the machine would have a useful life of 10 years with no salvage value. After two years, on Dec. 31, 2012, Peter corp. sold the machine to its 100 % owned subsidiary, Sonu Co. for $ 100,000. Sonu Co. estimated that the asset had a remaining useful life of five years. What is the amount of the gain or loss recorded by Peter Corp. at the time of the fixed transfer? What balance would have existed if the transfer had not taken place?

Show the worksheet entry on Dec. 31, 2012 to eliminate the asset transfer to make adjustment to change form Actual to As If the asset hadnt been transferred.