P Company owns 60% of the outstanding common stock of S Company. On January 1, 2016, P Company sold equipment to S Company for $300,000. The equipment cost P Company $1,000,000 on January 1st, 2010. The useful life at the time of sale was determined to be 10 years. After the sale from P to S, the management of S Company estimated that the equipment had a remaining useful life of 8 years. To solve: Prepare all journal entries for P and S (from initial purchase of equipment from 3rd parties, depreciation from initial purchase to sale between the related parties) on January 1, 2016 . In addition, prepare the w/p entry to eliminate the intercompany sale of equipment as of January 1, 2016. Finally, prepare the adjustment to depreciation on Dec. 31, 2016
P Company owns 60% of the outstanding common stock of S Company. On January 1, 2016, P Company sold equipment to S Company for $300,000. The equipment cost P Company $1,000,000 on January 1st, 2010. The useful life at the time of sale was determined to be 10 years. After the sale from P to S, the management of S Company estimated that the equipment had a remaining useful life of 8 years.
To solve: Prepare all
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