In the preparation of the 20X6 consolidated balance sheet, computer equipment will be

a. Debited for $1,000.

b. Debited for $15,000.

c. Credited for $24,000.

d. Debited for $40,000.

On January 1, 20X4, Gold Company purchased a computer with an expected economic life of five years. On January 1, 20X6, Gold sold the computer to TLK Corporation and recorded the following entry:

TLK Corporation holds 60 percent of Gold’s voting shares. Gold reported net income of $45,000 including the gain on the sale of equipment, and TLK reported income from its own operations of $85,000 for 20X6. There is no change in the estimated economic life of the equipment as a result of the intercompany transfer.

Transcribed Image Text:

Cash Accumulated Depreciation. Computer Equipment Gain on Sale of Equipment 39,000 16,000 40,000 15,000