Question
In: Accounting
Frazer Corporation purchased 60 percent of Minnow Corporation’s voting common stock on January 1, 20X1. On...
Frazer Corporation purchased 60 percent of Minnow
Corporation’s voting common stock on January 1, 20X1. On January 1,
20X5, Frazer received $225,000 from Minnow for a truck Frazer had
purchased on January 1, 20X2, for $275,000. The truck is expected
to have a 10-year useful life and no salvage value. Both companies
depreciate trucks on a straight-line basis.
Required:
a. Prepare the worksheet consolidation entry or entries needed
at December 31, 20X5, to remove the effects of the intercompany
sale. (If no entry is required for a transaction/event, select "No
journal entry required" in the first account field.)
1. Record the entry to eliminate the gain on the truck and to
correct the asset's basis.
2. Record the entry to adjust Accumulated Depreciation.
b. Prepare the worksheet consolidation entry or entries needed
at December 31, 20X6, to remove the effects of the intercompany
sale. (If no entry is required for a transaction/event, select "No
journal entry required" in the first account field.)
1. Record the entry to eliminate the gain on the truck and to
correct the asset's basis.
2. Record the entry to adjust Accumulated Depreciation.
Solutions
Expert Solution
|
a |
Give the worksheet eliminating entry on entries needed at december 31 20X5 |
|||||
|
Particulars |
Debit |
Credit |
||||
|
Gain on sale of truck |
32143 |
|||||
|
Truck (275000-225000) |
50000 |
|||||
|
Depreciation expense |
77857 |
|||||
|
Accumulated Depreciation |
4286 |
|||||
|
Accumulated depreciation adjustment |
||||||
|
$ |
||||||
|
Required depreciation |
||||||
|
[($275000/10 years*4 years] |
110000 |
|||||
|
Reported depreciation |
||||||
|
[($225,000/7 years * 1 year] |
-32143 |
|||||
|
Required increase |
77857 |
|||||
|
b |
Give the worksheet eliminating entry on entries needed at december 31 20X6 |
|||||
|
Particulars |
Debit |
Credit |
||||
|
Retained earnings Jan 1 (bal.fig) |
27857 |
|||||
|
Truck |
50000 |
|||||
|
Depreciation expense (77857-73214) |
4643 |
|||||
|
Accumulated Depreciation |
73214 |
|||||
|
Accumulated depreciation adjustment |
||||||
|
Required depreciation |
$ |
|||||
|
[($275000/10 years*5 years] |
137500 |
|||||
|
Reported depreciation |
||||||
|
[($225,000/7 years * 2 year] |
-64286 |
|||||
|
Required increase |
73214 |
|||||
ekkarill92 answered 1 year agoRelated Solutions
Frazer Corporation purchased 60 percent of Minnow Corporation’s voting common stock on January 1, 20X1. On...
Frazer Corporation purchased 60 percent of Minnow Corporation’s
voting common stock on January 1, 20X1. On January 1, 20X5, Frazer
received $237,000 from Minnow for a truck Frazer had purchased on
January 1, 20X2, for $287,000. The truck is expected to have a
10-year useful life and no salvage value. Both companies depreciate
trucks on a straight-line basis. I come up with Gain on Sale 36100
Truck 50,00 Accum Dep 86,100 But I cannot calculate out the
Adjusted Depreciation. I...
Frazer Corporation purchased 60 percent of Minnow Corporation’s voting common stock on January 1, 20X1. On...
Frazer Corporation purchased 60 percent of Minnow Corporation’s
voting common stock on January 1, 20X1. On December 31, 20X5,
Frazer received $258,000 from Minnow for a truck Frazer had
purchased on January 1, 20X2, for $348,000. The truck is expected
to have a 10-year useful life and no salvage value. Both companies
depreciate trucks on a straight-line basis.
Required:
a. Prepare the worksheet consolidation entry or entries needed
at December 31, 20X5, to remove the effects of the intercompany
sale....
Frazer Corporation purchased 60 percent of Minnow Corporation’s voting common stock on January 1, 20X1. On...
Frazer Corporation purchased 60 percent of Minnow Corporation’s
voting common stock on January 1, 20X1. On January 1, 20X5, Frazer
received $288,000 from Minnow for a truck Frazer had purchased on
January 1, 20X2, for $378,000. The truck is expected to have a
10-year useful life and no salvage value. Both companies depreciate
trucks on a straight-line basis.
Required:
a.
Prepare the worksheet consolidation entry or entries needed at
December 31, 20X5, to remove the effects of the intercompany...
Pitcher Corporation purchased 60 percent of Softball Corporation’s voting common stock on January 1, 20X1. On...
Pitcher Corporation purchased 60 percent of Softball
Corporation’s voting common stock on January 1, 20X1. On January 1,
20X5, Pitcher received $258,000 from Softball for a truck Pitcher
had purchased on January 1, 20X2, for $328,000. The truck is
expected to have a 10-year useful life and no salvage value. Both
companies depreciate trucks on a straight-line basis. Required:
a. Prepare the worksheet consolidation entry or entries needed
at December 31, 20X5, to remove the effects of the intercompany
sale....
Pitcher Corporation purchased 60 percent of Softball Corporation’s voting common stock on January 1, 20X1. On...
Pitcher Corporation purchased 60 percent of Softball
Corporation’s voting common stock on January 1, 20X1. On January 1,
20X5, Pitcher received $288,000 from Softball for a truck Pitcher
had purchased on January 1, 20X2, for $368,000. The truck is
expected to have a 10-year useful life and no salvage value. Both
companies depreciate trucks on a straight-line basis.
Required:
a. Prepare the worksheet consolidation entry or entries needed at
December 31, 20X5, to remove the effects of the intercompany sale....
Public Corporation acquired 90 percent of Station Company’s voting common stock on January 1, 20X1, for...
Public Corporation acquired 90 percent of Station Company’s
voting common stock on January 1, 20X1, for $502,200. At the time
of the combination, Station reported common stock outstanding of
$129,000 and retained earnings of $384,000, and the fair value of
the noncontrolling interest was $55,800. The book value of
Station’s net assets approximated market value except for patents
that had a market value of $45,000 more than their book value. The
patents had a remaining economic life of five years...
Public Corporation acquired 90 percent of Station Company’s voting common stock on January 1, 20X1, for...
Public Corporation acquired 90 percent of Station Company’s
voting common stock on January 1, 20X1, for $501,300. At the time
of the combination, Station reported common stock outstanding of
$121,000 and retained earnings of $381,000, and the fair value of
the noncontrolling interest was $55,700. The book value of
Station’s net assets approximated market value except for patents
that had a market value of $55,000 more than their book value. The
patents had a remaining economic life of ten years...
Pizza Corporation acquired 75 percent of Slice Corporation’s voting common stock on January 1, 20X4, for...
Pizza Corporation acquired 75 percent of Slice Corporation’s
voting common stock on January 1, 20X4, for $353,000, when the fair
value of its net identifiable assets was $466,000 and the fair
value of the noncontrolling interest was $113,000. Slice reported
common stock outstanding of $110,000 and retained earnings of
$230,000. The excess of fair value over book value of Slice’s net
assets was attributed to amortizable assets with a remaining life
of 10 years. On December 31, 20X4, Slice sold...
On January 1, 20X1, Pesto Corporation purchased 90 percent of Sauce Corporation's common stock at underlying...
On January 1, 20X1,
Pesto Corporation purchased 90 percent of Sauce Corporation's
common stock at underlying book value. At that date, the fair value
of the noncontrolling interest was equal to 10 percent of Sauce
Corporation's book value. Pesto uses the equity method in
accounting for its investment in Sauce. The stockholders' equity
section of Sauce at January 1, 20X5, contained the following
balances:
Common Stock ($5
par)
$
400,000
Additional
Paid-in Capital
200,000
Retained
Earnings
790,000
Accumulated
Other Comprehensive...
Parent Corporation acquired a 70 percent interest in Subsidiary Corporation’s outstanding voting common stock on January...
Parent Corporation acquired a 70 percent interest in Subsidiary
Corporation’s outstanding voting common stock on January 1, 2011,
for $735,000 cash. The stockholders’ equity of Subsidiary on this
date consisted of $750,000 capital stock and $150,000 retained
earnings. The difference between the fair value of Subsidiary and
the underlying equity acquired in Subsidiary was assigned $7,500 to
Subsidiary’s undervalued inventory, $21,000 to undervalued
buildings, $31,500 to undervalued equipment, and remainder assigned
to goodwill. The undervalued inventory items were Sold during...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- PLEASE DONT FORGET TO SOLVE THE ASSIGNMENT QUESTION MOST IMP: Ex1) Download the code from the...
- Customer is saying website is running slow when his end clients are trying to access the...
- Note: The answers to the following questions should be typed in the block of comments in...
- Python Describe the procedure for setting up the display of an image in a window.
- what are the fundamental similarity and differences between gap and dgap?
- Maria Gonzales is a 57-year-old operating room nurse who works full-time at a local hospital. She...
- Use the bond term's below to answer the question Maturity 7 years Coupon Rate 4% Face...
ADVERTISEMENT