Question
Pizza Factory Company owns 80% of the common stock of Sugar Company and they use the Cost Method. On January 1, 2019, Sugar Company sold
Pizza Factory Company owns 80% of the common stock of Sugar Company and they use the Cost Method. On January 1, 2019, Sugar Company sold fixed assets to Pizza Factory Corporation, for $500,000 with an estimated remaining useful life of 5 years.
Sugar Company had on their books, at the date of sale, the following for these fixed assets:
Original Cost 650,000
Accumulated Depreciation 400,000
Net Carrying Value 250,000
Prepare the consolidating work paper journal entries, relating to THE SALE OF THE EQUIPMENT, necessary in 2019. Prepare the consolidating work paper journal entries, relating to THE SALE OF THE EQUIPMENT, necessary in 2020.
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