The Auto Clinic is a wholly owned subsidiary of Fast-Check Equipment Company. Fast-Check Equipment sells and leases 4-wheel alignment machines. The usual selling price of each machine is $35,000; it has a cost to Fast-Check Equipment of $25,000. On January 1, 2011, Fast-Check Equipment leased such a machine to Auto Clinic. The lease provided for payments of $9,096 at the start of each year for five years. The payments include $1,000 per year for maintenance to be provided by the seller. There is a bargain purchase price of $2,000 at the end of the fifth year. The implicit interest rate in the lease is 10% per year. The equipment is being depreciated over eight years. The amortization schedule for the lease prepared by Fast-Check Equipment is as follows:
Prepare the eliminations and adjustments, in entry form, that would be required on a consolidated worksheet prepared on December 31, 2011.
Answer to relevant QuestionsSince its 100% acquisition of Dreger Corporation stock on December 31, 2012, Jayco Corporation has maintained its investment under the equity method. However, due to Dreger’s earning potential, the price included a $40,000 ...Refer to the preceding facts for Press’s acquisition of Simon common stock. Press uses the simple equity method to account for its investment in Simon. On January 1, 2013, Press held merchandise acquired from Simon for ...Refer to the preceding facts for Pontiac’s acquisition of 80% of Starks common stock and the bond transactions. Pontiac uses the simple equity method to account for its investment in Stark. On January 1, 2015, Stack held ...Pannier Company is the parent company that owns an 80% interest in Jodestar Company. The interest was acquired at book value, and the simple equity method is used to record the ownership interest. The trial balances of the ...Duckworth Corporation purchases an 80% interest in Panda Corporation on January 1, 2013, in exchange for 5,000 Duck-worth shares (market value of $18) plus $155,000 cash. The fair value of the NCI is proportionate to the ...
Post your question