Question
On January 1, 2018, DiDiego Corp. sold equipment to Smith Inc. (a wholly-owned subsidiary) for $168,000 in cash. The equipment originally cost $140,000 but had
On January 1, 2018, DiDiego Corp. sold equipment to Smith Inc. (a wholly-owned subsidiary) for $168,000 in cash. The equipment originally cost $140,000 but had a book value of only $98,000 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense was calculated using the straight-line method. DiDiego uses the equity method to account for its investment.
A. Prepare the consolidation entries that would be recorded in connection with this intra-entity equipment on December 31, 2018?
B. Prepare the consolidation entry that would be recorded in connection with this intra-entity equipmenton December 31, 2019?
To receive full credit for your consolidating entries: You are required to include the entries that would have been recorded on DiDiegos and Smiths individual books for this sale along with the table that we used in class (on page 237) to show your calculations
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