Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Wilson owned equipment with an estimated life of 10 years when it was acquired for an original cost of $80,000. The equipment had a book

Wilson owned equipment with an estimated life of 10 years when it was acquired for an original cost of $80,000. The equipment had a book value of $50,000 at January 1, 2010. On January 1, 2010, Wilson realized that the useful life of the equipment was longer than originally anticipated, at ten remaining years. On April 1, 2010 Simon Company, a 90% owned subsidiary of Wilson Company, bought the equipment from Wilson for $68,250 and for depreciation purposes used the estimated remaining life as of that date. The following data are available pertaining to Simon's income and dividends:

2010 2011 2012

Net income 100000 120000 130000

Dividends 40000 50000 60000 -Compute the amortization of gain through a depreciation adjustment for 2010 for consolidation purposes.

-Compute the gain on transfer of equipment reported by wilson for 2010.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing IT Infrastructures For Compliance

Authors: Martin Weiss, Michael G. Solomon

2nd Edition

1284090701, 978-1284090703

More Books

Students also viewed these Accounting questions

Question

Discuss labor unrest in China.

Answered: 1 week ago

Question

Explain union decertification.

Answered: 1 week ago

Question

Describe collective bargaining in the public sector.

Answered: 1 week ago