What would be the consolidation worksheet entries in relation to this asset when preparing the consolidated financial statements for the following accounting
Padre Ltd. holds 90 percent of the outstanding shares of Sonora Ltd. On January 1, 2019, Padre Ltd. transferred equipment to Sonora for $95,000. The equipment had cost $130,000 originally but had a $50,000 carrying value and five-year remaining life at the date of transfer.
Required:
What would be the consolidation worksheet entries in relation to this asset when preparing the consolidated financial statements for the following accounting periods ending at (Ignore the tax effect):
- 31 December 2019
- 31 December 2020
- 31 December 2021
Depreciation refers to the apportionment of the cost of an asset over its useful life. Moreover, depreciation also refers to the reduction in the value of an asset due to wear and tear, obsolescence, or passage of time. The different methods to charge depreciation are the straight-line method, declining balance method, units of production method, and so on.
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