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Required: Prepare elimination entries and complete the following worksheets PLEASE NOTE THAT THE FIRMS ARE USING A SEPARATE ACCUMULATED DEPRECIATION ACCOUNT!!!!!!!!!!! That will affect how
Required: Prepare elimination entries and complete the following worksheets | ||||||||||||||||||||||||
PLEASE NOTE THAT THE FIRMS ARE USING A SEPARATE ACCUMULATED DEPRECIATION ACCOUNT!!!!!!!!!!! | ||||||||||||||||||||||||
That will affect how the realization of the gain is recorded, and how the unrealized portion is carried forward to the following years!!! | ||||||||||||||||||||||||
Please note also that the number 13,200 shows up a few times; that's just a coincidence. | ||||||||||||||||||||||||
Questions: | ||||||||||||||||||||||||
20,000 | What was the book value of the asset on the date of sale, 1/1/21? | |||||||||||||||||||||||
30,000 | What was the accumulated depreciation on the asset on the date of sale? | |||||||||||||||||||||||
2021 | 2022 | 8,000 | How much was the gain or loss on the intercompany sale? | |||||||||||||||||||||
Sales | 100,000 | 80,000 | 180,000 | Sales | 110,000 | 85,000 | 195,000 | Upstream | Was the sale upstream or downstream? | |||||||||||||||
Dep. Exp | 15,000 | 10,000 | 2,000 | (23,000) | Dep. Exp | 15,000 | 10,000 | 2,000 | How much of the gain is realized/recognized each year? | |||||||||||||||
Other Expenses | 60,000 | 50,000 | (110,000) | Other Expenses | 65,000 | 55,000 | 3,000 | Value in cell E17 | ||||||||||||||||
Gain/loss on sale of asset | 3,000 | 3,000 | 0 | Gain/loss on sale of asset | 0 | Value in cell E30 | ||||||||||||||||||
Investment income | 12,300 | 12,300.0 | 0 | Investment income | 12,300 | 0 | Value in cell E31 | |||||||||||||||||
Net income | 37,300 | 23,000 | 15,300.0 | 2,000 | 47,000 | Net income | 42,300 | 20,000 | 0 | Value in cell F31 | ||||||||||||||
Income to NC Interest | Income to NC Interest | (23,000) | Value in cell G15 | |||||||||||||||||||||
Income to contolling interest | Income to contolling interest | 0 | Value in cell G17 | |||||||||||||||||||||
- | Value in cell G20 | |||||||||||||||||||||||
Beg R/E | 200,000 | 100,000 | 100,000 | 200,000 | Beg R/E | 207,300 | 103,000 | 0 | Value in cell O30 | |||||||||||||||
Add: Income | 37,300 | 23,000 | 60,300.0 | Add: Income | 42,300 | 20,000 | 0 | Value in cell O31 | ||||||||||||||||
Less: Dividends | 30,000 | 20,000 | 20,000 | 30,000 | Less: Dividends | 20,000 | 10,000 | 0 | Value in cell P31 | |||||||||||||||
Ending R/E | 207,300 | 103,000 | 207,300.0 | Ending R/E | 229,600 | 113,000 | - | Value in cell Q17 | ||||||||||||||||
- | Value in cell Q20 | |||||||||||||||||||||||
Current assets | 50,000 | 25,000 | 75,000 | Current assets | 50,000 | 55,000 | ||||||||||||||||||
Investment in Little | 78,300 | - | Investment in Little | 84,600 | ||||||||||||||||||||
PPE | 200,000 | 150,000 | PPE | 200,000 | 150,000 | |||||||||||||||||||
Acc Dep | 45,000 | 40,000 | Acc Dep | 60,000 | 50,000 | |||||||||||||||||||
Liabilities | 56,000 | 2,000 | 58,000 | Liabilities | 25,000 | 12,000 | ||||||||||||||||||
CS | 20,000 | 30,000 | 50,000 | CS | 20,000 | 30,000 | ||||||||||||||||||
RE | 207,300 | 103,000 | 310,300 | RE | 229,600 | 113,000 | ||||||||||||||||||
NC Interest | NC Interest |
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