Passport Manufacturing purchased an ultrasound drilling machine with a remaining 10-year economic life from a 70 percent-owned subsidiary for $360,000 on January 1, 20X6. Both companies use straight-line depreciation. The subsidiary recorded the following entry when it sold the machine to Passport:

Required

Give the worksheet consolidation entry or entries needed to remove the effects of the intercompany sale of equipment when consolidated financial statements are prepared as of 

(a) December 31, 20X6,

(b) December 31, 20X7.

Transcribed Image Text:

Cash Accumulated Depreciation Equipment Gain on Sale of Equipment 360,000 150,000 450,000 60,000