On January 1, 2021, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $200,000 in cash. The equipment had originally cost $180,000 but had a book value of only $110,000 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method. Ackerman's equipment of book value $200,000 and Brannigan's equipment of book value $150,000. Ackerman reported $300,000 in net income in 2021 (not including any investment income) while Brannigan reported $98,000. Ackerman attributed any excess acquisition-date fair value to Brannigan's unpatented technology, which was amortized at a rate of $4,000 per year. A) What is consolidated equipment balance?
On January 1, 2021, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $200,000 in cash. The equipment had originally cost $180,000 but had a book value of only $110,000 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method. Ackerman's equipment of book value $200,000 and Brannigan's equipment of book value $150,000. Ackerman reported $300,000 in net income in 2021 (not including any investment income) while Brannigan reported $98,000. Ackerman attributed any excess acquisition-date fair value to Brannigan's unpatented technology, which was amortized at a rate of $4,000 per year. A) What is consolidated equipment balance?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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On January 1, 2021, Ackerman sold equipment
to Brannigan (a wholly owned subsidiary) for
$200,000 in cash. The equipment had originally
cost $180,000 but had a book value of only
$110,000 when transferred. On that date, the
equipment had a five-year remaining life.
Depreciation expense is computed using the
straight-line method. Ackerman's equipment of
book value $200,000 and Brannigan's
equipment of book value $150,000.
Ackerman reported $300,000 in net income in
2021 (not including any investment income)
while Brannigan reported $98,000. Ackerman
attributed any excess acquisition-date fair value
to Brannigan's unpatented technology, which
was amortized at a rate of $4,000 per year.
A) What is consolidated equipment balance?
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