Mortar Corporation acquired 80 percent of Granite Corporation's voting common stock on January 1, 20X7. On December 31, 20X8, Mortar received $390,000 from Granite for equipment Mortar had purchased on January 1, 20X5, for $400,000. The equipment is expected to have a 10-year useful life and no salvage value. Both companies depreciate equipment on a straight-line basis.

12.

Required information

Based on the preceding information, in the preparation of the 20X8 consolidated financial statements, equipment will be:

debited for $1,000.

debited for $10,000.

credited for $15,000.

debited for $25,000.

13.

Required information

Based on the preceding information, the gain on sale of the equipment recorded by Mortar for 20X8 is:

$150,000

$65,000

$110,000

$40,000

14.

Required information

Based on the preceding information, in the preparation of the 20X9 consolidated financial statements, equipment will be:

debited for $1,000.

debited for $10,000.

credited for $15,000.

debited for $25,000.

15.

Based on the preceding information, in the preparation of the 20X9 consolidated income statement, depreciation expense will be:

debited for $25,000 in the consolidating entries.

credited for $15,000 in the consolidating entries.

debited for $15,000 in the consolidating entries.

credited for $25,000 in the consolidating entries.