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Padre holds 100 percent of the outstanding shares of Sonora. On January 1, 2019, Padre transferred equipment to Sonora for $122,000. The equipment had cost $152,000 originally but had a $62, 000 book value and five-year remaining life at the date of transfer. Depreciation expense is computed according to the straight-line method with no salvage value. Consolidated financial statements for 2021 currently are being prepared. What worksheet entries are needed in connection with the consolidation of this asset? Assume that the parent applies the partial equity method.

Padre holds 100 percent of the outstanding shares of Sonora. On January 1, 2019, Padre transferred equipment to Sonora for $122,000. The equipment had cost $152,000 originally but had a $62, 000 book value and five-year remaining life at the date of transfer. Depreciation expense is computed according to the straight-line method with no salvage value. Consolidated financial statements for 2021 currently are being prepared. What worksheet entries are needed in connection with the consolidation of this asset? Assume that the parent applies the partial equity method.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Padre holds 100 percent of the outstanding shares of Sonora. On January 1, 2019, Padre transferred equipment to Sonora for $122,000. The equipment had cost $152,000 originally but had a $62, 000 book value and five-year remaining life at the date of transfer. Depreciation expense is computed according to the straight-line method with no salvage value. Consolidated financial statements for 2021 currently are being prepared. What worksheet entries are needed in connection with the consolidation of this asset? Assume that the parent applies the partial equity method.
Transcribed Image Text:Padre holds 100 percent of the outstanding shares of Sonora. On January 1, 2019, Padre transferred equipment to Sonora for $122,000. The equipment had cost $152,000 originally but had a $62, 000 book value and five-year remaining life at the date of transfer. Depreciation expense is computed according to the straight-line method with no salvage value. Consolidated financial statements for 2021 currently are being prepared. What worksheet entries are needed in connection with the consolidation of this asset? Assume that the parent applies the partial equity method.
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