Pitcher Corporation purchased 60 percent of Softball Corporation's voting common stock on January 1, 20X1. On January 1, 20X5, Pitcher received $243,000 from Softball for a truck Pitcher had purchased on January 1, 20X2, for $303,000. 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: Prepare the worksheet consolidation entry or entries needed at December 31, 20X5, to remove the effects of the intercompany sale. Prepare the worksheet consolidation entry or entries needed at December 31, 20X6, to remove the effects of the intercompany sale.

CONCEPTS IN FED.TAX.,2020-W/ACCESS
20th Edition
ISBN:9780357110362
Author:Murphy
Publisher:Murphy
Chapter9: Acquisitions Of Property
Section: Chapter Questions
Problem 26P
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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 $243,000 from Softball for a truck Pitcher had purchased on January 1, 20X2, for $303,000. 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: Prepare the worksheet consolidation entry or entries needed at December 31, 20X5, to remove the effects of the
intercompany sale. Prepare the worksheet consolidation entry or entries needed at December 31, 20X6, to remove the
effects of the intercompany sale.
Transcribed Image Text:Pitcher Corporation purchased 60 percent of Softball Corporation's voting common stock on January 1, 20X1. On January 1, 20X5, Pitcher received $243,000 from Softball for a truck Pitcher had purchased on January 1, 20X2, for $303,000. 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: Prepare the worksheet consolidation entry or entries needed at December 31, 20X5, to remove the effects of the intercompany sale. Prepare the worksheet consolidation entry or entries needed at December 31, 20X6, to remove the effects of the intercompany sale.
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