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Madelyn, Inc. and Stillwell Co. are related companies subject to consolidation. On 1/1/2X, Stillwell Co. sold machinery to Madelyn, Inc. for $100,000 cash that had

Madelyn, Inc. and Stillwell Co. are related companies subject to consolidation. On 1/1/2X, Stillwell Co. sold machinery to Madelyn, Inc. for $100,000 cash that had an original purchase price of $150,000, useful life of 5 years, accumulated depreciation at the time of sale of $90,000, and was expected to be continued to be depreciated at $30,000 per year had it not been sold. Madelyn, Inc. placed the machine in service on 1/1/2X, and is depreciating it over 10 years using straight-line depreciation. The portion of the elimination entry at the time of consolidation at year-end 2X' to account for any required adjustment to the depreciation expense account would be:

Question 14 options:

a)

Debit to Depreciation Expense of $10,000

b)

Credit to Depreciation Expense of $15,000

c)

Debit to Depreciation Expense of $20,000

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