On January 1, 20X7, Wainwrite Corporation sold to Lance Corporation equipment it had purchased for $150,000 and
Question:
On January 1, 20X7, Wainwrite Corporation sold to Lance Corporation equipment it had purchased for $150,000 and used for eight years. Wainwrite recorded a gain of $14,000 on the sale. The equipment has a total useful life of 15 years and is depreciated on a straight-line basis. Wainwrite holds 70 percent of Lance's voting common shares.
Required
a. Give the journal entry made by Wainwrite on January 1, 20X7, to record the sale of equipment.
b. Give the journal entries recorded by Lance during 20X7 to record the purchase of equipment and year-end depreciation expense.
c. Give the elimination entry or entries related to the intercompany sale of equipment needed at December 31, 20X7, to prepare a full set of consolidated financial statements.
d. Give the elimination entry or entries related to the equipment required at January 1, 20X8, to prepare a consolidated balance sheet only.
Balance SheetBalance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
a Cash 84000 Accumulated Depreciation 80000 Equipment 150000 Gain on sale of Equipm...View the full answer
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker
