Thomson Corporation owns 70 percent of the outstanding stock of Stayer, Incorporated On January 1, 2019, Thomson acquired a building with a 10-year life for $300,000. Thomson depreciated the building on the straight line basis assuming no salvage value. On January 1, 2021, Thomson sold this building to Stayer for $280,000. At that time, the building had a remaining life of eight years but still no expected salvage value. In preparing financial statements for 2021, how does this transfer affect the computation of consolidated net income? Net income is reduced by $35.000 Net Income is reduced by $32,000 Net Income is reduced by $36.000 Net income is reduced by $40.000
Thomson Corporation owns 70 percent of the outstanding stock of Stayer, Incorporated On January 1, 2019, Thomson acquired a building with a 10-year life for $300,000. Thomson depreciated the building on the straight line basis assuming no salvage value. On January 1, 2021, Thomson sold this building to Stayer for $280,000. At that time, the building had a remaining life of eight years but still no expected salvage value. In preparing financial statements for 2021, how does this transfer affect the computation of consolidated net income? Net income is reduced by $35.000 Net Income is reduced by $32,000 Net Income is reduced by $36.000 Net income is reduced by $40.000
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 11E: On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an...
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