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Your assistance with this problem would be greatly appreciated. PROBLEM 1.6 ON JANUARY 1, 2002 TRUMP COMPANY ACQUIRED ALL OF THE STOCK OF CRUZ COMPANY

Your assistance with this problem would be greatly appreciated.

image text in transcribed PROBLEM 1.6 ON JANUARY 1, 2002 TRUMP COMPANY ACQUIRED ALL OF THE STOCK OF CRUZ COMPANY AT BOOK VALUE. NEITHER TRUMP NOR CRUZ PAY ANY DIVIDENDS AND TRUMP USES THE INITIAL VALUE METHOD FOR ITS INVESTMENT IN CRUZ ON JANUARY 1, 2010 TRUMP COMPANY PURCHASED A TRUCK FOR $400,000. THIS TRUCK HAS A 20 YEAR LIFE WITH NO SALVAGE AND IS BEING DEPRECIATED USING STRAIGHT LINE DEPRECIATION. ON JANUARY 1, 2014 CRUZ COMPANY PURCHASED THE TRUCK FROM TRUMP FOR $350,000 ISSUING TRUMP A 1 YEAR 10% NOTE WITH PRINCIPLE AND INTERESET DUE ON JANUARY 1 2015. CRUZ WILL DEPRECIATE THE TRUCK OVER 16 YEARS USING STRAIGHT LINE DEPRECIATION AND ZERO SALVAGE VALUE. ON JANUARY 1, 2015 CRUZ PAID THE INTEREST AND PRINCIPLE TO TRUMP ON JANUARY 1, 2018 CRUZ SOLD THE TRUCK TO RUBIO (AN OUTSIDE COMPANY) FOR $275,000. REQUIRED: RECORD THE JOURNAL ENTRY TRUMP MADE WHEN HE BOUGHT THE TRUCK A.) B.) C.) D.) E.) F.) G.) H.) DETERMINE THE ANNUAL DEPRECIATION OF THE TRUCK TO TRUMP COMPANY MAKE THE JOURNAL ENTRY TRUMP MAKES WHEN IT SELLS THE TRUCK TO CRUZ MAKE THE JOURNAL ENTRY CRUZ MAKES WHEN IT BUYS THE TRUCK DETERMINE THE ANNUAL DEPRECIATION OF THE TRUCK TO CRUZ COMPANY MAKE THE JOURNAL ENTRY CRUZ MAKES WHEN IT PAYS OFF THE LOAN TO TRUMP MAKE THE JOURNAL ENTRY CRUZ MAKES WHEN IT SELLS THE TRUCK TO RUBIO THE UNCONSOLIDATED INCOMES OF TRUMP AND CRUZ FOR 2014 TO 2018 ARE AS FOLLOWS: 2014: TRUMP 1,000,000 CRUZ 200,000 2015 TRUMP 1,100,000 CRUZ 220,000 2016 TRUMP 1,200,000 CRUZ 240,000 2017 TRUMP 1,300,000 CRUZ 260,000 2018 TRUMP 1,400,000 CRUZ 280,000 DETERMINE CONSOLIDATED INCOME FOR EACH YEAR I.) ON JANUARY 1 2014 TRUMP HAD CONSOLIDATED RETAINED EARNINGS OF $5,000,000 WHAT IS TRUMP'S UNCONSOLIDATED AND CONSOLIATED RETAINED EARNINGS ON a. 12/31/14 b. 12/31/15 c. 12/31/16 d. 12/31/17 e. 12/31/18 J.) PREPARE THE NECESSARY WORKSHEET ENTRIES NEEDED a. IN 2014 b. IN 2015 c. IN 2018

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