Question: Stern Manufacturing purchased an ultrasound drilling machine with a remaining 10-year economic life from a 70 percent-owned subsidiary for $360,000 on January 1, 20X6. Both

Stern Manufacturing purchased an ultrasound drilling machine with a remaining 10-year economic life from a 70 percent-owned subsidiary for $360,000 on January 1, 20X6. Both companies use straight line depreciation. The subsidiary recorded the following entry when it sold the machine to Stern:

Required
Give the worksheet Elimination entry or entries needed to remove the effects of the intercompany sale of equipment when consolidated financial statements are prepared as of
(a) December 31, 20X6, and
(b) December 31,20X7.

Cash Accumulated Depreciation 360,000 150,000 Equipment Gain on Sale of Equipment 450,000

Step by Step Solution

★★★★★

3.42 Rating (177 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a Eliminate the gain on Equipment and correct asset... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

297-B-A-G-F-A (2314).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

Stella is tired of her sewing machine continually breaking down. The threading mechanism takes her significant time to fix every time and sometimes causes tears in the fabric so she has to start...

Financial statements are prepared for arrange of different business entities. Write a paper in which you address the following: 1) Identify the different entities financial statements can be prepared...

Financial statements are prepared according to a number of accounting principles, some of which are listed below: 1. Business entity 2. Going concern 3. Monetary unit 4. Historical cost 5....

Stern Manufacturing purchased an ultrasound drilling machine with a remaining 10-year economic life from a 70 percent-owned subsidiary for $360,000 on January 1, 20X6. Both companies use...

Stern Manufacturing purchased an ultrasound drilling machine with a remaining 10-year economic life from a 70 percent-owned subsidiary for 5380,000 on January 1, 20X8. Both companies use...

Stern Manufacturing purchased an ultrasound drilling machine with a remaining 10-year economic life from a 70 percent-owned subsidiary for $360,000 on January 1, 20X6. Both companies use...

Passport Manufacturing purchased an ultrasound drilling machine with a remaining 10-year economic life from a 70 percent-owned subsidiary for $360,000 on January 1, 20X6. Both companies use...

The Otto-cycle engine in a Mercedes-Benz SLK230 has a compression ratio of 8.8. (a) What is the ideal efficiency of the engine? Use Y = 1.40. (b) The engine in a Dodge Viper GT2 has a slightly higher...

For each of the following jobs, select the two kinds of tests you think would be most important to include in the selection process. Explain why you chose those tests. a. City bus driver b. Insurance...

Research, such as research by Skantz and Marchesini, as well as that of Hite, Owers, and Rogers found that unlike divestitures, announcements of voluntary liquidations were not associated with...

The HNH Corporation will pay a constant dividend of $2 per share, per year, in perpetuity. Assume all investors pay a 20% tax on dividends and that there is no capital gains tax. The cost of capital...

Zenith Corporation acquired 70 percent of Down Corporations common stock on December 31, 20X4, for $102,200. The fair value of the noncontrolling interest at that date was determined to be $43,800....

Temple Corporation acquired 75 percent of Dynamic Corporations voting common stock on December 31, 20X4, for $390,000. At the date of combination, Dynamic reported the following: At December 31,...

Power Corporation acquired 70 percent of Silk Corporations common stock on December 31, 20X2. Balance sheet data for the two companies immediately following the acquisition follow: At the date of the...

Griffin's Goat Farm, Inc., has sales of $682,000, costs of $344,000, depreciation expense of $88,000, interest expense of $54,000, a tax rate of 25 percent, and paid out $39,000 in cash dividends....

A) C) fogy D) business Strategy Which of these is NOT one of the pro ceso operations p ly chain Strategy lo help management choose the right of structural and infrastructural elements, based on clear...

Happy Times, Incorporated, wants to expand its party stores into the Southeast. In order to establish an immediate presence in the area, the company is considering the purchase of the privately held...