Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On January 1, 2012, Smeder Company, an 80% owned subsidiary of Collins, Inc. transferred equipment with a 10-year life (six of which remain with no

On January 1, 2012, Smeder Company, an 80% owned subsidiary of Collins, Inc. transferred equipment with a 10-year life (six of which remain with no salvage value) to Collins in exchange for $84,000 cash. At the date of transfer, Smeder's records carried the equipment at a cost of $120,000 less accumulated depreciation of $48,000. Straight-line depreciation is used. Smeder reported net income of $28,000 and $32,000 for 2012 and 2013, respectively. All net income effects of the intra-entity transfer are attributed to the seller for consolidation purposes.

For consolidation purposes, what net debit or credit will be made for the year 2012 relating to the accumulated depreciation for the equipment transfer?


Step by Step Solution

3.52 Rating (162 Votes )

There are 3 Steps involved in it

Step: 1

Using the dafa frovided Smeder Compony 120000 Annuol degoreciation r... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Business The Challenge Of Global Competition

Authors: Donald Geringer Ball, J. Michael Geringer, Jeanne M. McNett, Michael S. Minor

13th Edition

978-0078112638, 007811263X, 77606124, 978-0077606121

More Books

Students also viewed these Accounting questions

Question

What are the purposes of an export bill of lading?

Answered: 1 week ago