P Ltd acquired 80% of S Ltd in January 20x1. In December 20x8, S Ltd sold a piece of machinery to P Ltd for $12 million. Immediately before the sale, the machinery was carried in S Ltd’s books at cost of $10 million less accumulated depreciation of $3 million. The machinery had been used by S Ltd as property, plant and equipment and will be used by P Ltd as property, plant and equipment. The 20x8 consolidation adjusting entries for the inter-company sale of machinery should be:

P Ltd acquired 80% of S Ltd in January 20x1. In December 20x8, S Ltd sold a piece of machinery to P Ltd for $12 million. Immediately before the sale, the machinery was carried in S Ltd’s books at cost of $10 million less accumulated depreciation of $3 million. The machinery had been used by S Ltd as property, plant and equipment and will be used by P Ltd as property, plant and equipment. The 20x8 consolidation adjusting entries for the inter-company sale of machinery should be:

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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