question 2

Question 5

2-On Jan 2, 2020, Parent sells to its wholly owned investee equipment that had cost $250,000. The selling price was $180,000 and accumulated depreciation on that date was $75,000. The subsidiary depreciates the equipment over its remaining life of 10 years. Required: a. Compute the difference between the annual depreciation expense when Parent owned the equipment and depreciation expense recorded by the subsidiary. b. Compute the gain on sale recorded by the parent. c. Prepare the consolidation entries for 2020 related to the equipment sale. d. Prepare the consolidation entries for 2022 related to the equipment sale. 5-Parent Co. acquired 100% of Sub, Inc. on January 1, 2021. During 2021, Parent sold goods to Sub for $260,000 that cost Parent $170,000. Sub still owned 30% of the goods at the end of the year. In their pre-consolidation books, cost of goods sold was $1,050,000 for Parent and $375,000 for Sub. Required: a. Prepare all consolidation entries related to inventory and cost of goods sold for 2021. b. Compute consolidated cost of goods sold for 2021. c. Assuming that the remainder of the inventory was sold to third parties during 2022, prepare the 2022 consolidation entry to recognize the previously deferred profit