Pomeroy Corporation owns an 80% interest in Sherer Company and a 90% interest in Tampa Company. OnJanuary
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Pomeroy Corporation owns an 80% interest in Sherer Company and a 90% interest in Tampa Company. OnJanuary 2, 2014, Tampa Company sold equipment with a book value of $600,000 to Sherer Company for$780,000. This equipment has a remaining useful life ofthree years. Sherer Company reported $100,000 andTampa Company reported $150,000 in net income (including sales to affiliates) in 2014.
Prepare the 2014 and 2015 consolidated statements workpaper entries to eliminate the effects of this sale ofequipment.
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