Woody Corporation acquired 70% of Buzz Companys voting common stock on January 1, 20X3, for $158,900. Buzz reported common stock outstanding of $100,000 and retained earnings of $85,000. The fair value of the noncontrolling interest was 68,100 on the date of acquisition. Buildings and equipment held by Buzz had a fair value that was $25,000 higher than book value. The remainder of the differential was assigned to a copyright held by Buzz. Buildings and Equipment had a 10-year remaining life and the copyright had a 5-year life on the date of acquisition.

On January 1, 20X5, Buzz sold equipment to Woody for $91,600. Buzz had purchased this equipment on January 1, 20X3 for $100,000 and depreciated it using straight-line depreciation over 10 years with an estimated residual value of $10,000. No change was made to the estimated economic life or residual value of the equipment as a result of the intercompany transfer. Woody uses the fully adjusted equity method.

What entry is needed to eliminate Buzzs gain on the sale of equipment to Woody?

	a.	Dr. Gain on Sale 9,600 Dr. Equipment 8,400 Cr. Accumulated Depreciation 18,000
	b.	Dr. Gain on Sale 11,600 Dr. Equipment 8,400 Cr. Accumulated Depreciation 20,000
	c.	Dr. Accumulated Depreciation 18,000 Cr. Equipment 8,400 Cr. Loss on Sale 9,600
	d.	Dr. Equipment 8,400 Cr. Accumulated Depreciation 8,400