det Party correct Mark 1031 out of 11.00 Nemove Downstream Intercompany Equipment Transactions On July 1, 2018, Pearl Industries sold administrative equipment with a book value of 1,000,000 to its subsidiary, Shiek Shoes, for $800,000. At the date of sale, the equipment had a remaining life of five years. It is being straight line deprecated on Shieks books. It is now December 31, 2020, the end of the accounting year, and you are preparing the working paper to consolidate the trial balances of Pearl and Shiel Shiek still owns the equipment Required (a) Prepare the required eliminating entries for this intercompany equipment sale for the December 31, 2020, consolidation working paper, Consolidation Journal Description Debit Credit Equipment.net 140,000 Investment in Shiek 140.000 To eliminate the beginning of year unconfirmed loss Depreciation expense 40.000 Equipment.net 40,000 To correct the depreciation expense recorded by Shiek in 2020 0 OV (b) It is now December 31, 2021. Prepare the required eliminating entries for this intercompany equipment transaction for the December 31, 2021 consolidation working paper, Consolidation Journal Description Debit Credit Equipment, net 100.000 Investment in Shiek 0 100,000 To eliminate the beginning of year unconfirmed oss Deprecation expense 40.000 Equipment.net 0 40,000 O 0 100.000 O 100,ODD Equipment, net 2 Investment in Shiek To eliminate the beginning of year unconfirmed loss. Depreciation expense + Equipment net To correct depreciation expense recorded by Shiek in 2021 O 40.000 0 40.000 c) Now assume that Shiek sells the equipment to an outside party for $400,000 on January 1, 2022. What is the consolidated gain on the sale of equipment? $ 30,000 X What is the gain reported by Shiek?s 30,000 X Prepare the required eliminating entries for the December 31, 2022 consolidation working paper Consolidation Journal Description Debit Credit Gain on sale of equipment 60.000 Investment in Shlek 60.000 0 Check Partially correct Marist 10131/11.00