Required information Plesco Corporation acquired 80 percent of Slesco Corporation's voting common stock on January 1, 20x7. On January 1, 20X8, Plesco received $350,000 from Slesco for equipment Plesco had purchased on January 1, 2005, for $400,000. The equipment is expected to have a 10-year useful life and no salvage value. Both companies depreciate equipment on a straight-line basis. Based on the preceding information in the preparation of the 20x8 consolidated financial statements, equipment will be: Multiple Choice debited for $50,000 debited for $40,000 credited for $70,000 debited for $25,000 Required information Plesco Corporation acquired 80 percent of Slesco Corporation's voting common stock on January 1, 20x7. On January 1, 20X8, Plesco received $350,000 from Slesco for equipment Plesco had purchased on January 1, 20X5, for $400,000. The equipment is expected to have a 10-year useful life and no salvage value. Both companies depreciate equipment on a straight-line basis. Based on the preceding information, the gain on sale of equipment recorded by Plesco for 20x8 is: Multiple Choice $70,000 $65,000 $50,000 $40,000 Required information Plesco Corporation acquired 80 percent of Slesco Corporation's voting common stock on January 1, 20X7. On January 1, 20X8, Plesco received $350,000 from Slesco for equipment Plesco had purchased on January 1, 20X5, for $400,000. The equipment is expected to have a 10-year useful life and no salvage value. Both companies depreciate equipment on a straight-line basis. Based on the preceding information, in the preparation of consolidation entries related to the equipment transfer for the 20x8 consolidated financial statements, net effect on accumulated depreciation will be: Multiple Choice a decrease of $50,000. an increase of $110,000 an increase of $120,000 a decrease of $160,000 Required information Plesco Corporation acquired 80 percent of Slesco Corporation's voting common stock on January 1, 20x7 On January 1, 20X8, Plesco received $350,000 from Slesco for equipment Plesco had purchased on January 1, 20X5, for $400,000. The equipment is expected to have a 10-year useful life and no salvage value. Both companies depreciate equipment on a straight-line basis. Based on the preceding information, in the preparation of the 20x9 consolidated income statement, depreciation expense will be: Multiple Choice Debited for $40,000 in the consolidating entries. Credited for $10,000 in the consolidating entries. O Debited for $10,000 in the consolidating entries. Credited for $40,000 in the consolidating entries. Required information Plesco Corporation acquired 80 percent of Slesco Corporation's voting common stock on January 1, 20x7. On January 1, 20X8, Plesco received $350,000 from Slesco for equipment Plesco had purchased on January 1, 20X5, for $400,000. The equipment is expected to have a 10-year useful life and no salvage value. Both companies depreciate equipment on a straight-line basis. Based on the preceding information, in the preparation of consolidation entries related to the equipment transfer for the 20x9 consolidated financial statements, net effect on accumulated depreciation will be: Multiple Choice a decrease of $110,000 an increase of $110,000 an increase of $100.000 a decrease of $100,000
