Company R owns a 30% interest in Company E, which it acquires at book value. Company E
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Company R owns a 30% interest in Company E, which it acquires at book value. Company E reports net income of $50,000 for 2015 (ignore taxes). There is an intercompany sale of equipment at a gain of $20,000 on January 1, 2015. The equipment has a 5-year life. What is Company R’s investment income for 2015, and what adjusting entry (if any) does Company R need to make as a result of the equipment sale, if:
a. Company E made the sale?
b. Company R made the sale?
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Related Book For
Advanced Accounting
ISBN: 978-1305084858
12th edition
Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng
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