2-On Jan 2, 2020, Parent sells to its wholly owned investee equipment that had cost $250,000. The selling price was $180,000 and accumulated depreciation on that date was $75,000. The subsidiary depreciates the equipment over its remaining life of 10 years. Required: a. Compute the difference between the annual depreciation expense when Parent owned the equipment and depreciation expense recorded by the subsidiary. b. Compute the gain on sale recorded by the parent. c. Prepare the consolidation entries for 2020 related to the equipment sa
2-On Jan 2, 2020, Parent sells to its wholly owned investee equipment that had cost $250,000. The selling price was $180,000 and accumulated depreciation on that date was $75,000. The subsidiary depreciates the equipment over its remaining life of 10 years. Required: a. Compute the difference between the annual depreciation expense when Parent owned the equipment and depreciation expense recorded by the subsidiary. b. Compute the gain on sale recorded by the parent. c. Prepare the consolidation entries for 2020 related to the equipment sa
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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2-On Jan 2, 2020, Parent sells to its wholly owned investee equipment that had cost $250,000. The selling price was $180,000 and
Required:
a. Compute the difference between the annual depreciation expense when Parent owned the equipment and depreciation expense recorded by the subsidiary.
b. Compute the gain on sale recorded by the parent.
c. Prepare the consolidation entries for 2020 related to the equipment sale.
d. Prepare the consolidation entries for 2022 related to the equipment sale.
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