Question: On January 1 2011 Company P sold a machine to
On January 1, 2011, Company P sold a machine to its 70%-owned subsidiary, Company S, for $60,000. The book value of the machine was $50,000. The machine was depreciated using the straight-line method over five years. On December 31, 2013, Company S sold the machine to a nonaffiliated firm for $35,000. On the consolidated statements, how much gain or loss on the intercompany machine sale should be recognized in 2011, 2012, and 2013?
Answer to relevant QuestionsCompany S is a 70%-owned subsidiary of Company P. Company S is building a ship to be used by Company P. The ship was 40% completed in 2011 and 100% completed in 2012. The actual and budgeted profit on the ship was $100,000. ...Assume the same facts as in Exercise, but in addition, assume that Saratoga is itself in need of cash. It discounts the note received from Windsor at First Bank on July 1, 2013, at a discount rate of 8% per annum. In ...Apple Contractors, an 80%-owned subsidiary, is constructing a warehouse for its parent, Plum Corporation. The following information is available on December 31, 2011: Percent of completion . . . . . . . . . . . . . . . . . . ...Arther Corporation acquired all of the outstanding $10 par voting common stock of Trent Inc., on January 1, 2012, in exchange for 50,000 shares of its $10 par voting common stock. On December 31, 2011, the common stock of ...Refer to the preceding facts for Purple’s acquisition of Salmon common stock. On January 1, 2012, Salmon held merchandise sold to it by Purple for $14,000. This beginning inventory had an applicable gross profit of 40%. ...
Post your question