A parent company sells equipment solve this accounting questions A parent company sells equipment to its subsidiary on January 1, 2018,for $90,000. At the time, the equipment was reported on the parent'sbooks at a net book value of $60,000. The remaining life of theequipment as of January 1, 2018, is six years, and straight-linedepreciation, no residual value is used.At what net value should this equipment be reported on December 31,2020, consolidated balance sheet (three years after the intercompanyequipment sale)?a. $45,000b. $90,000c. $30,000d. $40,000

Step 1: Define Net Book Value of Fixed AssetsThe net book value refers to the cost at which a fixed…

Answered: A parent company sells equipment to its…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 18E

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On January 1, 2019 Pink Corp. sold a machine for $7,400 to slink Corp., its wholly-owned subsidiary. Pink paid $13,00 for this machine. On January 1, 2019, accumulated depreciation was $4,500. The remaining useful life is assumed to be 5 years. Straight line depreciation is used by both companies. In pink's December 31, 2019 consolidated balance sheet, at what amount should accumulated depreciation be reported?
On January 1, 2021, ABC Company sold machinery to MNO, its wholly-owned subsidiary for P450,000. The Equipment had cost ABC P560,000. The book value at the time of sale was P230,000. ABC used a 5-year life, with a salvage value o P10,000, and uses sum of the year's digits depreciation. MNO will adopt this practice. On the consolidated statement of financial position at December 31, 2021, the deprecation expense should be stated at:
On January 1, 2021, ABC Company sold machinery to MNO, its wholly-owned subsidiary for P450,000. The Equipment had cost ABC P560,000. The book value at the time of sale was P230,000. ABC used a 5-year life, with a salvage value o P10,000 and uses sum of the years digits depreciation. MNO will adopt this practice. On the consolidated statement of financial position at December 31, 2021, the deprecation expense should be stated at: Your answer
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Adams, Inc., acquires Clay Corporation on January 1, 2020, in exchange for $713,300 cash. Immediately after the acquisition, the two companies have the following account balances. Clay’s equipment (with a five-year remaining life) is actually worth $641,000. Credit balances are indicated by parentheses. Adams Clay Current assets $ 382,000 $ 272,000 Investment in Clay 713,300 0 Equipment 837,000 584,000 Liabilities (202,000 ) (224,000 ) Common stock (350,000 ) (150,000 ) Retained earnings, 1/1/20 (1,380,300 ) (482,000 ) In 2020, Clay earns a net income of $74,100 and declares and pays a $5,000 cash dividend. In 2020, Adams reports net income from its own operations (exclusive of any income from Clay) of $160,000 and declares no dividends. At the end of 2021, selected account balances for the two companies are as follows: Adams Clay Revenues $ (544,000 ) $ (286,000 ) Expenses 394,400 214,500 Investment…

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