Font Alignment Number Cells Editing Ideas Sensi Cell Styles A x V fx CD E F ANSWER ALL ITEMS a, b, c and d BELOW. SHOW ALL WORK IN SUPPORT OF YOUR ANSWER WHERE APPROPRIATE. IF YOU DO NOT PROVIDE WORK IN SUPPORT OF YOUR ANSWERS YOU MAY NOT GET FULL CREDIT INTRA-ENTITY ASSET TRANSACTIONS On January 1, 2019, Reed Corp. sold a parcel of land to Rossi Co. At the time Reed owned 80% of Rossi Co. Common Stock. The land had a book value of $60,000 and was sold to Rossi for $80,000. What journal entry, if any, should be recorded on the consolidation work sheet for the consolidation the operations of Reed Corp and Rossi Co. as a result this transaction? SHOW ALL WORK IN SUPPORT OF YOUR ANSWER. 80,000 Cash Land Gain of Sale of Land 60,000 20,000 6 b. Using the information in part a. above, the balance sheets of both entities Reed Corp and Rossi Co. as of December 31, 2018, included the following balances for land: for Reed--$360,000, and for Rossi--$140,000. There were no other transactions that affected the companies' land accounts during 2018 other than the transaction reported above in part a. What is the consolidated balance for land on the 12/31/2019 consolidated balance sheet? YOU MUST SHOW ALL WORK IN SUPPORT OF YOUR ANSWER TO GET CREDITI A. $440,000. B. $500,000. c. $520,000. D. $560,000. E. $580,000. Your answer SHOW WORK IN SUPPORT OF YOUR ANSWER Using the information in parts a. and b. above, on March 1, 2020, Rossi Co. sold the tract of land that it had purchased From Reed Corp. on 1/1/2019 as per part a. above, to Prentice Industries for $80,000. Prentice Industries was not affiliated with either Reed Corp. or Rossi Co. What journal entry would be made on the consolidated worksheet to reflect the sale of the tract of land to Prentice Industries? SHOW ALL WORK IN SUPPORT OF YOUR ANSWER PROB 5 NCI ACO DURING YEAR PROB 6 Step Acq. PROB 7 INTRA ASSET - - d. Lee Corp. owns all the outstanding common stock of Sherman Inc. On January 1, 2017, Lee Corp acquired a production machine for $500,000. The machine had a ten-year life and was to be depreciated on the straight-line basis with no salvage value anticipated. On January 1, 2019, Lee sold this equipment to Sherman for $425,000. At that time, the building had a remaining life of eight years and still no expected salvage value. In preparing financial statements for 12/31/2019, how does this transfer affect the calculation of Lee's share of consolidated net income? YOU MUST SHOW ALL WORK IN SUPPORT OF YOUR ANSWER IN ORDER TO GET CREDIT! A. Consolidated net income must be reduced by $17,500. B. Consolidated net income must be reduced by $21,875. C. Consolidated net income must be reduced by $25,000. D. Consolidated net income must be reduced by $28,125. E. Consolidated net income must be reduced by $32,500. Your answer: SHOW WORK IN SUPPORT OF YOUR
