In the preparation of the 20x4 consolidated income statement, depreciation expense will be:a. Debited for 5,000 in eliminating entriesb. Credited for 5,000 in eliminating entriesc. Debited for 13,000 in eliminating entriesd. Credited for 13,000 in eliminating entries In the preparation of the 20x4 consolidated balance sheet, the computer equipment will be:a. Debited for 1,000b. Debited for 15,000c. Credited for 24,000d. Debited for 40,000 On January 1, 20x2, Gold Company purchased a computer with an expectedeconomic life of five years. On January 1, 20x4, Gold sold the computer to TLKCorporation and recorded the following entry:Cash 39,000Accumulated Depreciation 16,000Computer Equipment 40,000Gain on sale of equipment 15,000TLK Corporation holds 60 percent of Gold's voting shares. Gold reported netincome of P45,000, and TLK reported income from its own operations ofP85,000 for 20x4. There is no change in the estimated life of the equipment asa result of the inter-corporate transfer.

1)Indicate the amount of depreciation expense thatrecorded in the consolidated incomestatement:The…

Answered: minating entries c. Debited for 13,000…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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In the preparation of the 20x4 consolidated income statement, depreciation expense will be:

a. Debited for 5,000 in eliminating entries

b. Credited for 5,000 in eliminating entries

c. Debited for 13,000 in eliminating entries

d. Credited for 13,000 in eliminating entries

In the preparation of the 20x4 consolidated balance sheet, the computer equipment will be:

a. Debited for 1,000

b. Debited for 15,000

c. Credited for 24,000

d. Debited for 40,000

On January 1, 20x2, Gold Company purchased a computer with an expected
economic life of five years. On January 1, 20x4, Gold sold the computer to TLK
Corporation and recorded the following entry:
Cash 39,000
Accumulated Depreciation 16,000
Computer Equipment 40,000
Gain on sale of equipment 15,000
TLK Corporation holds 60 percent of Gold's voting shares. Gold reported net
income of P45,000, and TLK reported income from its own operations of
P85,000 for 20x4. There is no change in the estimated life of the equipment as
a result of the inter-corporate transfer.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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