Question: Why does an intra entity sale of a depreciable asset such
Why does an intra-entity sale of a depreciable asset (such as equipment or a building) require subsequent adjustments to depreciation expense within the consolidation process?
Answer to relevant QuestionsIf a seller makes an intra-entity sale of a depreciable asset at a price above book value, the seller’s beginning Retained Earnings is reduced when preparing each subsequent consolidation. Why does the amount of the ...Hardwood, Inc., holds a 90 percent interest in Pittstoni Company. During 2010, Pittstoni sold inventory costing $77,000 to Hardwood for $110,000. Of this inventory, $40,000 worth was not sold to outsiders until 2011. During ...Following are several figures reported for Preston and Sanchez as of December 31, 2011:.:.Preston acquired 70 percent of Sanchez in January 2010. In allocating the newly acquired subsidiary’s fair value at the acquisition ...On January 1, 2011, Slaughter sold equipment to Bennett (a wholly owned subsidiary) for $120,000 in cash. The equipment had originally cost $100,000 but had a book value of only $70,000 when transferred. On that date, the ...Assume the same basic information as presented in problem 33 except that Monica employs the equity method of accounting. Hence, it reports $102,740 investment income for 2011 with an Investment account balance of $826,220. ...
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