Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Pam Corporation holds 70 percent ownership of Spray Enterprises. On December 31, 20X6, Spray paid Pam $40,000 for a truck that Pam had purchased for

image text in transcribedimage text in transcribedimage text in transcribed

Pam Corporation holds 70 percent ownership of Spray Enterprises. On December 31, 20X6, Spray paid Pam $40,000 for a truck that Pam had purchased for $45,000 on January 1, 20x2. The truck was considered to have a 15-year life from January 1, 20X2, and no residual value. Both companies depreciate equipment using the straight-line method. Required: a. Prepare the worksheet consolidation entry or entries needed on December 31, 20X6, to remove the effects of the intercompany sale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) view transaction list Consolidation Worksheet Entries Record the entry to eliminate the gain on the truck and to correct the asset's basis. Note: Enter debits before credits. Event Accounts Debit Credit 1 Record entry Clear entry view consolidation entries b. Prepare the worksheet consolidation entry or entries needed on December 31, 20X7, to remove the effects of the intercompany sale. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) view transaction list Consolidation Worksheet Entries Record the entry to eliminate the gain on the truck and to correct the asset's basis. Note: Enter debits before credits. Event Accounts Debit Credit 1 Record entry Clear entry view consolidation entries consolidation Worksheet Entries

Step by Step Solution

There are 3 Steps involved in it

Step: 1

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

Audit Sampling An Introduction

Authors: Dan M. Guy, D. R. Carmichael, O. Ray Whittington

5th Edition

047137590X, 978-0471375906

More Books

Students also viewed these Accounting questions

Question

What is quality of work life ?

Answered: 1 week ago

Question

What is meant by Career Planning and development ?

Answered: 1 week ago

Question

What are Fringe Benefits ? List out some.

Answered: 1 week ago