Plumber Corporation owns 60 percent of Socket Corporation’s voting common stock. On December 31, 20X4, Plumber paid Socket $276,000 for dump trucks Socket had purchased on January 1, 20X2. Both companies use straight-line depreciation. The consolidation entry included in preparing consolidated financial statements at December 31, 20X4, was

Required

a. What amount did Socket pay to purchase the trucks on January 1, 20X2?

b. What was the economic life of the trucks on January 1, 20X2?

c. Give the worksheet consolidation entry needed in preparing the consolidated financial statements at December 31, 20X5.

Transcribed Image Text:

Trucks Gain on Sale of Trucks Accumulated Depreciation 24,000 36,000 60,000