Question
Little Corporation acquired 60 percent of Lord Enterprises on June 1, 20x5. At that date, Lord had inventory with a market value 80000 greater than
Little Corporation acquired 60 percent of Lord Enterprises on June 1, 20x5. At that date, Lord had inventory with a market value 80000 greater than book value and plant assets (net) with a market value of 192000 greater than book value. The estimated remaining life of the inventory and the plant assets are four months and 10 years, respectively. What is the amount of purchase differential amortization is recognized in worksheet elimination number 3 in 20x5?
a. Cost of Goods Sold 80000 debit; Depreciation Expense 11200 debit
b. Cost of Goods Sold 80000 credit; Depreciation Expense 11200 credit
c. Cost of Goods Sold 80000 debit; Depreciation Expense 19200 debit
d. Cost of Goods Sold 80000 credit; Depreciation Expense 19200 credit
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