Rollins owns 100% of Felix.Rollins purchased equipment on January 1, 2002 for $100,000. The equipment had a useful life of 10 years and straight line depreciation was used. On January 1, 2009 Rollins sells this equipment to Felix for $80,000. Felix uses a 5 year depreciable life for th equipment and continues to use the equipment through 2010. a. How much gain on sale does Rollins record in 2009. b. How much does Felix record the purchase for in 2009. c. How much is the consolidated gain on sale of equipment in 2009.

Rollins owns 100% of Felix.Rollins purchased equipment on January 1, 2002 for $100,000. The equipment had a useful life of 10 years and straight line depreciation was used. On January 1, 2009 Rollins sells this equipment to Felix for $80,000. Felix uses a 5 year depreciable life for th equipment and continues to use the equipment through 2010. a. How much gain on sale does Rollins record in 2009. b. How much does Felix record the purchase for in 2009. c. How much is the consolidated gain on sale of equipment in 2009.

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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