Pam Corporation holds 70 percent ownership of Spray Enterprises. On December 31, 20X6, Spray paidPam $31,000 for a truck that Pam had purchased for $36,000 on January 1, 20X2. The truck wasconsidered to have a 10-year life from January 1, 20X2, and no residual value. Both companiesdepreciate equipment using the straight-line method.a. Prepare the worksheet consolidation entry or entries needed on December 31, 20X6, to removethe effects of the intercompany sale.Gain on Sale of truckTruckAccumulated depreciationDebitCreditb. Prepare the worksheet consolidation entry or entries needed on December 31, 20X7, to removethe effects of the intercompany sale.Investment in SprayTruckAccumulated depreciationDebitCreditDebitCreditDepreciation ExpenseAccumulated depreciation

Reference; Baydoun, N., Sulaiman, M., Willett, R. J., & Ibrahim, S. (2018). Principles of…

Answered: Pam Corporation holds 70 percent…

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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On 31/03/2022, Sea Ltd (the parent) sold equipment with a carrying amount of $290,000 to Bill Ltd for $275,000. The equipment initally had a useful life of ten years and was purchased for $600,000. The remaining useful life of the equipment is 7.25 years depreciated on a straight line basis. 1) Prepare the consolidation journal entries for this item at its transaction date.
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Pitcher Corporation purchased 60 percent of Softball Corporation's voting common stock on January 1, 20X1. On January 1, 20X5. Pitcher received $240,000 from Softball for a truck Pitcher had purchased on January 1, 20x2, for $300,000. The truck is expected to have a 10-year useful life and no salvage value. Both companies depreciate trucks on a straight-line basis Required: a. Prepare the worksheet consolidation entry or entries needed at December 31, 20X5, to remove the effects of the intercompany sale Note: If no entry is required for a transaction/event, select "No journal entry required in the first account field. view transaction list Consolidation Worksheet Entries < A Record the entry to eliminate the gain on the truck and to correct the asset's basis. B Note: Enter debits before credits Event 1 Record entry Accounts Clear entry Debit Credit view consolidation entries
Parent Corporation acquired 80 percent of the outstanding voting stock of Sub, Inc., on January 1, 2021, when Sub had a net book value of $500,000. Any excess fair value was assigned to patents and amortized at a rate of $10,000 per year for eight years. 2022 net income and dividends for the parent before consideration of its relationship with Sub (and before adjustments for intra-entity sales) and for the sub are below: Net Income Parent $500,000 Sub $150,000 (Parent NI excludes income from sub) Dividends 60,000 20,000 Inventory balances from the two companies' 12/31/2022 balance sheets were as follows: Account Title Inventory Parent $185,000 Sub $95,000 Intra-Entity Sales: • 2021: Intra-entity sales of $125,000 with an original cost of $47,500 were made. 50% of this inventory was held by the consolidated company as of 12/31/2021. 2022: Intra-entity sales of $100,000 with an original cost of $35,000 were made. 25% of this inventory was held by the consolidated company as of…
Pitcher Corporation purchased 60 percent of Softball Corporation's voting common stock on January 1, 20X1. On January 1, 20X5, Pitcher received $297,000 from Softball for a truck Pitcher had purchased on January 1, 20X2, for $357,000. The truck is expected to have a 10-year useful life and no salvage value. Both companies depreciate trucks on a straight-line basis. Required: a. Prepare the worksheet consolidation entry or entries needed at December 31, 20X5, to remove the effects of the intercompany sale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) b. Prepare the worksheet consolidation entry or entries needed at December 31, 20X6, to remove the effects of the intercompany sale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Sea Ltd (the parent) sold an item of plant to Bill Ltd (the subsidiary) for $12,000 on 31/12/2021. The total carrying amount was $8,000 with a remaining useful life of 6 years. 1) Prepare the consolidation journal entries for this item at its transaction date.
Give me answer the general accounting question
On January 1, 20X1, Amber Products Corporation sold land costing $200,000 to its subsidiary, Jerry Interiors Corporation, for $240,000. Jerry still held the land at the end of 20X2. Jerry sold the land to a nonaffiliate on March 31, 20X3, for $255,000. Prepare the consolidation entry related to the land at the end of 20X2. Debit Land for $40,000; Credit Gain on Sale of Land for $40,000 Debit Investment in Jerry for $40,000; Credit Land for $40,000 Debit Gain on Sale of Land for $40,000; Credit Land for $40,000 bit Land for $40,000; Credit Investment in Jerry for $40,000.
On January 1, year 1, P Company sold a machine for P900,000 to S Company, its wholly owned subsidiary. P paid P1,100,000 for this machine, which had accumulated depreciation of P250,000. P estimated a P100,000 salvage value and depreciated the machine on the straight-line method over twenty years, a policy which S continued. In P's December 31, year 1 consolidated balance sheet, this machine should be included in cost and accumulated depreciation as
On January 1, Year 1, East Company purchased West Company. East Company paid $670,000 cash and assumed all of West Company's liabilities. West's books showed tangible assets of $578,000, liabilities of $54,000, and equity of $632,000. An appraiser assessed the fair market value of the tangible assets at $622,000 at the date of acquisition. On December 31, Year 4 East determines that the goodwill suffered a $32,000 permanent impairment. However, on December 31, Year 6 East estimated that it had recovered $12,000 of the impairment that had previously been considered to be permanent impairment. Based on this information, the book value of the goodwill shown on the December 31, Year 6 balance sheet is: Multiple Choice O O O $102,000. $134,000. $54,000. $70,000.
Sulu Company is 80% owned by Palawan, Inc. On January 1, 2011, Sulu paid P100,000 for a truck with an expected life of 10 years with no residual value. Sulu sold the truck to Palawan, on January 1, 2017. During the preparation of the consolidation working paper for 2017, the following working paper elimination entry for the intercompany sale of trucks was made: Truck 48,000 Gain on sale of truck 12,000 Depreciation Expense 3,000 Accumulated Depreciaton 57,000 What amount did palawan pay sulu for the truck? Please explain.
Baker Ltd sold an item of machinery to its subsidiary Lanny Ltd for $8000. The original cost of the machinery was $12000 and the carrying amount of the machinery in the books of Baker Ltd at the time of sale was $10000. The consolidation journal entry at the end of the financial year is: a. Dr Profit on sale $4000 Cr Machinery $2000 Cr Accumulated depreciation $2000 b. Dr Machinery $6000 Cr Loss on sale $2000 Cr Accumulated depreciation $2000 c. Dr Machinery $4000 Cr Loss on sale $2000 Cr Accumulated depreciation $2000 d. Dr Machinery $4000 Cr Profit on sale $2000 Cr Accumulated depreciation…

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