Pluto Corporation owns 70 percent of Saturn Company's stock. On July 1, 20X4, Pluto sold a piece of equipment to Saturn for $56,350. Pluto had purchased this equipment on January 1, 20X1, for $63,000. The equipment's original 15-year estimated total economic life remains unchanged. Both companies use straight-line depreciation. The equipment's residual value is considered negligible. Based on the information provided, in the preparation of the 20X4 consolidated financial statements, equipment will be ____ in the consolidation entries. Multiple Choice A. debited for $56,350 B. debited for $6,650 C. credited for $63,000 D. debited for $63,000
Pluto Corporation owns 70 percent of Saturn Company's stock. On July 1, 20X4, Pluto sold a piece of equipment to Saturn for $56,350. Pluto had purchased this equipment on January 1, 20X1, for $63,000. The equipment's original 15-year estimated total economic life remains unchanged. Both companies use straight-line depreciation. The equipment's residual value is considered negligible. Based on the information provided, in the preparation of the 20X4 consolidated financial statements, equipment will be ____ in the consolidation entries. Multiple Choice A. debited for $56,350 B. debited for $6,650 C. credited for $63,000 D. debited for $63,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Pluto Corporation owns 70 percent of Saturn Company's stock. On July 1, 20X4, Pluto sold a piece of equipment to Saturn for $56,350. Pluto had purchased this equipment on January 1, 20X1, for $63,000. The equipment's original 15-year estimated total economic life remains unchanged. Both companies use straight-line depreciation. The equipment's residual value is considered negligible. Based on the information provided, in the preparation of the 20X4 consolidated financial statements, equipment will be ____ in the consolidation entries. Multiple Choice
A. debited for $56,350
B. debited for $6,650
C. credited for $63,000
D. debited for $63,000
A. debited for $56,350
B. debited for $6,650
C. credited for $63,000
D. debited for $63,000
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