Marty holds 75 percent of Clover's voting common shares. On January 1, 20X7, Marty Corporation sold to Clover Corporation equipment it had purchased for $180,000 and used for eight years. Marty recorded a gain of $14,000 on the sale. The equipment has a total useful life of 15 years and is depreciated on a straight-line basis. Which of the following is the consolidation entry to adjust depreciation expense and accumulated depreciation for the excess depreciation? Debit Depreciation Expense for $2,000; Credit Accumulated Depreciation for $2,000 O Debit Accumulated Depreciation for $12,000; Credit Depreciation Expense for $12,000 O Debit Accumulated Depreciation for $2,000; Credit Depreciation Expense for $2,000 Debit Accumulated Depreciation for $10,000; Credit Depreciation Expense for $10,000

Marty holds 75 percent of Clover's voting common shares. On January 1, 20X7, Marty Corporation sold to Clover Corporation equipment it had purchased for $180,000 and used for eight years. Marty recorded a gain of $14,000 on the sale. The equipment has a total useful life of 15 years and is depreciated on a straight-line basis. Which of the following is the consolidation entry to adjust depreciation expense and accumulated depreciation for the excess depreciation? Debit Depreciation Expense for $2,000; Credit Accumulated Depreciation for $2,000 O Debit Accumulated Depreciation for $12,000; Credit Depreciation Expense for $12,000 O Debit Accumulated Depreciation for $2,000; Credit Depreciation Expense for $2,000 Debit Accumulated Depreciation for $10,000; Credit Depreciation Expense for $10,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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