Cat Corporation is 80% owned by Dog Inc. On January 1, 2014, Cat Corporation paid P100,000 for a truck with an expected economic life of 10 years and no residual value. Cat Corp sold the track to Dog Inc. on January 1, 2020. During the preparation of the consolidated working paper for 2020, the following working paper entry was made to eliminate the effects of the intercompany truck sale: Truck- 48,000 Gain on sale of truck - 12,000 Accumulated Depreciation - 60,000 What amount of depreciation expense was recorded by Dog Inc. during 2020? a.10,000 b. 13,000

Cat Corporation is 80% owned by Dog Inc. On January 1, 2014, Cat Corporation paid P100,000 for a truck with an expected economic life of 10 years and no residual value. Cat Corp sold the track to Dog Inc. on January 1, 2020. During the preparation of the consolidated working paper for 2020, the following working paper entry was made to eliminate the effects of the intercompany truck sale: Truck- 48,000 Gain on sale of truck - 12,000 Accumulated Depreciation - 60,000 What amount of depreciation expense was recorded by Dog Inc. during 2020? a.10,000 b. 13,000

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

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 11P

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Question

Cat Corporation is 80% owned by Dog Inc. On January 1, 2014, Cat
Corporation paid P100,000 for a truck with an expected economic life of
10 years and no residual value. Cat Corp sold the track to Dog Inc. on
January 1, 2020. During the preparation of the consolidated working
paper for 2020, the following working paper entry was made to eliminate
the effects of the intercompany truck sale:
Truck- 48,000
Gain on sale of truck - 12,000
Accumulated Depreciation - 60,000
What amount of depreciation expense was recorded by Dog Inc. during
2020?
a.10,000
b. 13,000
c. 10,400
d. 12,000

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