N3.Preparing the [I] consolidation entries for sale of landAssume that during 2015 a wholly owned subsidiary sells land that originally cost $540,000 to its parent for a sale price of $600,000. The parent holds the land until it sells the land to an unaffiliated company on December 31, 2019. The parent uses the equity method of pre-consolidation bookkeeping. a. Prepare the required [I] consolidation entry in 2015.DescriptionCredit[lgain][lgain]◆[lgain]b. Prepare the required [I] consolidation entry required at the end of each year 2016 through 2018.DescriptionDebitCreditLandDebit◆◆00◆♦c. Assume that the parent re-sells the land outside of the consolidated group for $630,000 on December 31, 2019. Prepare thejournal entry made by the parent to record the sale and the required [l] consolidation entry for 2019.DescriptionDebitCredit0000000000000000d. What will be the amount of gain reported in the consolidated income statement in 2019?$0

Full Consolidation - This method is used for accounting when parents get full control over the…

Answered: N3. Preparing the [I] consolidation…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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N3.

Preparing the [I] consolidation entries for sale of land

Assume that during 2015 a wholly owned subsidiary sells land that originally cost $540,000 to its parent for a sale price of $600,000. The parent holds the land until it sells the land to an unaffiliated company on December 31, 2019. The parent uses the equity method of pre-consolidation bookkeeping.

a. Prepare the required [I] consolidation entry in 2015.
Description
Credit
[lgain]
[lgain]
◆
[lgain]
b. Prepare the required [I] consolidation entry required at the end of each year 2016 through 2018.
Description
Debit
Credit
Land
Debit
◆
◆
0
0
◆
♦
c. Assume that the parent re-sells the land outside of the consolidated group for $630,000 on December 31, 2019. Prepare the
journal entry made by the parent to record the sale and the required [l] consolidation entry for 2019.
Description
Debit
Credit
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
d. What will be the amount of gain reported in the consolidated income statement in 2019?
$0

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