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minating entries c. Debited for 13,000 in eliminating entries d. Credited for 13,000 in eliminating entries

minating entries c. Debited for 13,000 in eliminating entries d. Credited for 13,000 in eliminating entries

FINANCIAL ACCOUNTING
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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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.
Transcribed Image Text: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.
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