On January 1, 2012, Smeder Company, an 80 owned subsidiary of Collins, Inc transferred equipment with a 10 year life (six of which remain with no salvage value ) to Collins in exchange for $84,000 cash At the date of transfer, Smeder 's records carried the equipment at a cost of $120,000 less accum...

Compute the amount of gain on sale of equipment by Company S to C Inc Gain on s ...

On January 1, 2012, Smeder Company, an 80% owned subsidiary of Collins, Inc. transferred equipment with a

Question:

On January 1, 2012, Smeder Company, an 80% owned subsidiary of Collins, Inc. transferred equipment with a 10-year life (six of which remain with no ) to Collins in exchange for $84,000 cash. At the date of transfer, Smeder's records carried the equipment at a cost of $120,000 less accumulated depreciation of $48,000. Straight-line depreciation is used. Smeder reported net income of $28,000 and $32,000 for 2012 and 2013, respectively. All net income effects of the intra-entity transfer are attributed to the seller for consolidation purposes.Compute Collins' share of Smeder's net income for 2012.
$11,200.
$14,400.
$12,400.
$12,800.
$18,000.
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...