This is what I have but it is wrong can someone help guide me through this problem B) UNREALIZED NET GAIN $ 36,000ORIGINAL COST $ 120,000 SALE OF EQUIPMENT $ 60,000 UNREALIZED GAIN 01/2019 $ 45,00050000*90% ACCUMULATED DEPRECIATION (110,000) BV 01/2019 (10,000) DEPRECIATION ON GAIN $ (9,000)50000/5*90% BOOK VALUE 10,000 GAIN ON SALE 50,000 UNREALIZED GAIN 01/2020 $ 36,000 Pearl Company acquired90 %of Star Corporation on 1/2018. Fair values of Star's assets and liabilitiesapproximated book values on that date. Pearl uses the initial value methodto account for its investment in Star.On 1/2019, Pearl bought equipment from Star for $60,000 thathad originally cost Star $120,000 and hadof Accumulated depreciation at the time. The equipment had a five-year$ 110,000remaining life and was being depreciated using the straight line method.You are preparing the worksheet for the 2020 fiscal year.b. How much unrealized net gain from the equipment transfer remains at thebeginning of 2020? (this is the amount you will need for the *TA entry at 1/2020.)

Given, LIFE = 5 Years Original cost = $ 120,000 Accumulated Depreciation = $ 110,000 Book Value = $…

Answered: Pearl Company acquired 90 % of Star…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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This is what I have but it is wrong can someone help guide me through this problem

B)	UNREALIZED NET GAIN	$ 36,000	ORIGINAL COST	$ 120,000	SALE OF EQUIPMENT	$ 60,000	UNREALIZED GAIN 01/2019	$ 45,000	50000*90%
			ACCUMULATED DEPRECIATION	(110,000)	BV 01/2019	(10,000)	DEPRECIATION ON GAIN	$ (9,000)	50000/5*90%
			BOOK VALUE	10,000	GAIN ON SALE	50,000	UNREALIZED GAIN 01/2020	$ 36,000

Pearl Company acquired
90 %
of Star Corporation on 1/2018. Fair values of Star's assets and liabilities
approximated book values on that date. Pearl uses the initial value method
to account for its investment in Star.
On 1/2019, Pearl bought equipment from Star for $60,000 that
had originally cost Star $120,000 and had
of Accumulated depreciation at the time. The equipment had a five-year
$ 110,000
remaining life and was being depreciated using the straight line method.
You are preparing the worksheet for the 2020 fiscal year.
b. How much unrealized net gain from the equipment transfer remains at the
beginning of 2020? (this is the amount you will need for the *TA entry at 1/2020.)

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