On January 1, 2006, Payton Co. sold equipment to its subsidiary, Starker Corp., for $115,000. The equipment

Question:

On January 1, 2006, Payton Co. sold equipment to its subsidiary, Starker Corp., for $115,000. The equipment had cost $125,000, and the balance in accumulated depreciation was $45,000.The equipment had an estimated remaining useful life of eight years and $0 salvage value. Both companies use straight-line depreciation. On their separate 2006 income statements, Payton and Starker reported depreciation expense of $84,000 and $60,000, respectively.

a. Create the eliminations for consolidation due to the following transaction for 2006 and 2009. That would be TA, ED, *TA, and *ED,

b. What is the amount of depreciation on the 2006 consolidated income statement?

Consolidated Income Statement
When talking about the group financial statements the consolidated financial statements include Consolidated Income Statement that a parent must prepare among other sets of consolidated financial statements. Consolidated Income statement that is... Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...