On January 1, Year 17, Devi Corp. sold to Charlottetown Ltd. equipment it had purchased for $300,000 and used for eight years. Devi recorded a gain of $28,000 on the sale. The equipment has a total useful life of 15 years and is depreciated on a straight-line basis. Devi holds 70 percent of Charlottetown's voting shares. Neither company owns any other equipment. Required (a) Give the journal entry made by Devi on January 1, Year 17, to record the sale of equipment. (b) Give the journal entries recorded by Charlottetown during Year 17 to record the purchase of equipment and year-end depreciation expense. (c) What amounts should be reported on the Year 17 consolidated statements for equipment, accumulated depreciation, depreciation expense and gain on sale of equipment?

On January 1, Year 17, Devi Corp. sold to Charlottetown Ltd. equipment it had purchased for $300,000 and used for eight years. Devi recorded a gain of $28,000 on the sale. The equipment has a total useful life of 15 years and is depreciated on a straight-line basis. Devi holds 70 percent of Charlottetown's voting shares. Neither company owns any other equipment. Required (a) Give the journal entry made by Devi on January 1, Year 17, to record the sale of equipment. (b) Give the journal entries recorded by Charlottetown during Year 17 to record the purchase of equipment and year-end depreciation expense. (c) What amounts should be reported on the Year 17 consolidated statements for equipment, accumulated depreciation, depreciation expense and gain on sale of equipment?

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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