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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 $270.000 from Softball for a truck Pitcher had purchased on January 1, 20X2, for $340,000. The truck is expected to have a 10 year useful life and no salvege 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 b. Prepare the worksheet consolidation entry or entries needed at December 31, 20X6, 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.

Pitcher Corporation purchased 60 percent of Softball Corporation's voting common stock on January 1, 20X1. On January 1, 20X5, Pitcher received $270.000 from Softball for a truck Pitcher had purchased on January 1, 20X2, for $340,000. The truck is expected to have a 10 year useful life and no salvege 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 b. Prepare the worksheet consolidation entry or entries needed at December 31, 20X6, 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.

FINANCIAL ACCOUNTING
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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Pitcher Corporation purchased 60 percent of Softball Corporation's voting common stock on January 1, 20X1. On January 1, 20X5, Pitcher received $270,000 from Softball for a truck Pitcher had purchased on January 1, 20X2, for $340,000. 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. No A B Event 1 2 Gain on sale Truck Answer is complete but not entirely correct. Accounts Accumulated depreciation Accumulated depreciation Depreciation expense ✓ ✓ ♥ ✓ ♥ Debit 32,000✔ 70,000 11,000 X Credit 102,000✔ 11,000 X b. Prepare the worksheet consolidation entry or entries needed at December 31, 20X6, 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. No A B Event 1 2 > Answer is complete but not entirely correct. Accounts Investment in Softball Corporation Truck Accumulated depreciation Accumulated depreciation Depreciation expense 433 63 Debit 8,000 X 70,000 ✓ 32,000 X Credit 120,000 X 32,000
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 $270,000 from Softball for a truck Pitcher had purchased on January 1, 20X2, for $340,000. 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. No A B Event 1 2 Gain on sale Truck Answer is complete but not entirely correct. Accounts Accumulated depreciation Accumulated depreciation Depreciation expense ✓ ✓ ♥ ✓ ♥ Debit 32,000✔ 70,000 11,000 X Credit 102,000✔ 11,000 X b. Prepare the worksheet consolidation entry or entries needed at December 31, 20X6, 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. No A B Event 1 2 > Answer is complete but not entirely correct. Accounts Investment in Softball Corporation Truck Accumulated depreciation Accumulated depreciation Depreciation expense 433 63 Debit 8,000 X 70,000 ✓ 32,000 X Credit 120,000 X 32,000
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