Padre Ltd. holds 90 percent of the outstanding shares of Sonora Ltd. On January 1, 2019, Padre Ltd. transferred equipment to Sonora for $95,000. The equipment had cost $130,000 originally but had a $50,000 carrying value and five-year remaining life at the date of transfer. Depreciation expense is computed according to the straight-line method with no residual value. Required: What would be the consolidation worksheet entries in relation to this asset when preparing the consolidated financial statements for the following accounting periods ending at (Ignore the tax effect): 31 December 2019 31 December 2020 31 December 2021

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Padre Ltd. holds 90 percent of the
outstanding shares of Sonora Ltd. On
January 1, 2019, Padre Ltd. transferred
equipment to Sonora for $95,000. The
equipment had cost $130,000 originally but
had a $50,000 carrying value and five-year
remaining life at the date of transfer.
Depreciation expense is computed
according to the straight-line method with
no residual value.
Required:
What would be the consolidation worksheet
entries in relation to this asset when
preparing the consolidated financial
statements for the following accounting
periods ending at (Ignore the tax effect):
31 December 2019
31 December 2020
31 December 2021
Transcribed Image Text:Padre Ltd. holds 90 percent of the outstanding shares of Sonora Ltd. On January 1, 2019, Padre Ltd. transferred equipment to Sonora for $95,000. The equipment had cost $130,000 originally but had a $50,000 carrying value and five-year remaining life at the date of transfer. Depreciation expense is computed according to the straight-line method with no residual value. Required: What would be the consolidation worksheet entries in relation to this asset when preparing the consolidated financial statements for the following accounting periods ending at (Ignore the tax effect): 31 December 2019 31 December 2020 31 December 2021
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