Preparing the [1] consolidation entries for sale of land Assume that during 2015 a wholly owned subsidiary sells land that originally cost $450,000 to its parent for a sale price of $500,000. The parent holds the land until it sells the land to an unaffiliated company on December 31, 2019. The parent uses the equity method of pre-consolidation bookkeeping. a. Prepare the required [] consolidation entry in 2015. Description Debit Credit [gain] b. Prepare the required [I] consolidation entry required at the end of each year 2016 through 2018. Description Debit Credit [gain] [gain] ÷ Land c. Assume that the parent re-sells the land outside of the consolidated group for $525,000 on December 31, 2019. Prepare the journal entry made by the parent to record the sale and the required [1] consolidation entry for 2019. Description Debit Credit 0 0 ÷ ÷ 0 0 0 0 0 0 0 0 0 0 0 0 d What will be the amount of gain reported in the consolidated income statement in 20192
Preparing the [1] consolidation entries for sale of land Assume that during 2015 a wholly owned subsidiary sells land that originally cost $450,000 to its parent for a sale price of $500,000. The parent holds the land until it sells the land to an unaffiliated company on December 31, 2019. The parent uses the equity method of pre-consolidation bookkeeping. a. Prepare the required [] consolidation entry in 2015. Description Debit Credit [gain] b. Prepare the required [I] consolidation entry required at the end of each year 2016 through 2018. Description Debit Credit [gain] [gain] ÷ Land c. Assume that the parent re-sells the land outside of the consolidated group for $525,000 on December 31, 2019. Prepare the journal entry made by the parent to record the sale and the required [1] consolidation entry for 2019. Description Debit Credit 0 0 ÷ ÷ 0 0 0 0 0 0 0 0 0 0 0 0 d What will be the amount of gain reported in the consolidated income statement in 20192
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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![Preparing the [I] consolidation entries for sale of land
Assume that during 2015 a wholly owned subsidiary sells land that originally cost $450,000 to its parent for a sale price of $500,000. The parent holds the land until it sells the land to an unaffiliated company on December 31, 2019. The parent uses the equity
method of pre-consolidation bookkeeping.
a. Prepare the required [I] consolidation entry in 2015.
Description
Debit
Credit
[lgain]
[gain]
♦
b. Prepare the required [I] consolidation entry required at the end of each year 2016 through 2018.
Description
Debit
Credit
[lgain]
Land
+
◆
0
0
→
♦
♦
◆
0
0
c. Assume that the parent re-sells the land outside of the consolidated group for $525,000 on December 31, 2019. Prepare the journal entry made by the parent to record the sale and the required [1] consolidation entry for 2019.
Description
Debit
Credit
0
0
0
0
0
0
0
0
0
0
0
0
0
0
d. What will be the amount of gain reported in the consolidated income statement in 2019?
$0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3cadaab7-0242-405d-ab75-d1a15c225b30%2F79acd252-a347-4939-87cb-59be645f1454%2Fc5ybj4m_processed.png&w=3840&q=75)
Transcribed Image Text:Preparing the [I] consolidation entries for sale of land
Assume that during 2015 a wholly owned subsidiary sells land that originally cost $450,000 to its parent for a sale price of $500,000. The parent holds the land until it sells the land to an unaffiliated company on December 31, 2019. The parent uses the equity
method of pre-consolidation bookkeeping.
a. Prepare the required [I] consolidation entry in 2015.
Description
Debit
Credit
[lgain]
[gain]
♦
b. Prepare the required [I] consolidation entry required at the end of each year 2016 through 2018.
Description
Debit
Credit
[lgain]
Land
+
◆
0
0
→
♦
♦
◆
0
0
c. Assume that the parent re-sells the land outside of the consolidated group for $525,000 on December 31, 2019. Prepare the journal entry made by the parent to record the sale and the required [1] consolidation entry for 2019.
Description
Debit
Credit
0
0
0
0
0
0
0
0
0
0
0
0
0
0
d. What will be the amount of gain reported in the consolidated income statement in 2019?
$0
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