Parent buys building (useful life 10 years) for $3,000,000 on January 1, 2020. On that same date, parent sells building to 80% owned subsidiary for $4,000,000. Subsidiary will use the same 10 year depreciable life.How much depreciation expense will the subsidiary record in 2020.How much is consolidated depreciation expense in 2020.3. What two worksheet entries are required for year end 2020 (hint: entries TA and ED)

Answered: Parent buys building (useful life 10…

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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Parent buys building (useful life 10 years) for $3,000,000 on January 1, 2020. On that same date, parent sells building to 80% owned subsidiary for $4,000,000. Subsidiary will use the same 10 year depreciable life.

How much depreciation expense will the subsidiary record in 2020.
How much is consolidated depreciation expense in 2020.

3. What two worksheet entries are required for year end 2020 (hint: entries TA and ED)

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Consolidated financial statements are group financial statements of all related entities which is combination of all assets, liabilities income, expenses of all entities.

Consolidated financial statements are prepared to know ture and fair presentation of current position after combination of financial statements of all entities.

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