Pam Corporation holds 70 percent ownership of Spray Enterprises. On December 31, 20X6, Spray paid Pam...

 

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Pam Corporation holds 70 percent ownership of Spray Enterprises. On December 31, 20X6, Spray paid Pam $31,000 for a truck that Pam had purchased for $36,000 on January 1, 20X2. The truck was considered to have a 10-year life from January 1, 20X2, and no residual value. Both companies depreciate equipment using the straight-line method. a. Prepare the worksheet consolidation entry or entries needed on December 31, 20X6, to remove the effects of the intercompany sale. Gain on Sale of truck Truck Accumulated depreciation Debit Credit b. Prepare the worksheet consolidation entry or entries needed on December 31, 20X7, to remove the effects of the intercompany sale. Investment in Spray Truck Accumulated depreciation Debit Credit Debit Credit Depreciation Expense Accumulated depreciation Pam Corporation holds 70 percent ownership of Spray Enterprises. On December 31, 20X6, Spray paid Pam $31,000 for a truck that Pam had purchased for $36,000 on January 1, 20X2. The truck was considered to have a 10-year life from January 1, 20X2, and no residual value. Both companies depreciate equipment using the straight-line method. a. Prepare the worksheet consolidation entry or entries needed on December 31, 20X6, to remove the effects of the intercompany sale. Gain on Sale of truck Truck Accumulated depreciation Debit Credit b. Prepare the worksheet consolidation entry or entries needed on December 31, 20X7, to remove the effects of the intercompany sale. Investment in Spray Truck Accumulated depreciation Debit Credit Debit Credit Depreciation Expense Accumulated depreciation

Answer rating: 100% (QA)

a Prepare the worksheet consolidation entry or entries needed on December 31 20X6 to remove the effe... View the full answer