A B C D G H K M N 0 P Q R S T U 1 Big Co. owns 60% of Little Co, and uses the full equity method to account for their investmerit 2 Assume Little had zero accumulated depreciation at acquisition several years ago. 3 It is now 2021. On 1/1/21 Little sells PPE to Big for $28,000. The PPE originally cost $50,000, and was originally purchased on 1/1/15. 4 It was expected to have a 12 year useful life. 5 6 Required: Prepare elimination entries and complete the following worksheets 7 PLEASE NOTE THAT THE FIRMS ARE USING A SEPARATE ACCUMULATED DEPRECIATION ACCOUNT!! 8 That will affect how the realization of the gain is recorded, and how the unrealized portion is carried forward to the following years!! 9 Please note also that the number 13,200 shows up a few times; that's just a coincidence. 10 11 Questions: 12 What was the book value of the as 13 2021 What was the accumulated depre 2022 14 Sales 100,000 80,000 How much was the gain or loss on Sales 110,000 85,000 15 Dep. Exp Was the sale upstream or downst 15,000 10,000 Dep. Exp 15,000 16 10,000 Other Expenses 60,000 How much of the gain is realized/ 50,000 Other Expenses 65,000 $5,000 17 Gain/loss on sale of asset Value in cell E17 3,000 Gain/loss on sale of asset 18 Value in cell E30 Investment income 12,300 Investment income 12,300 19 Value in cell E31 Net income 37,300 23,000 Net income 20 12,300 20,000 Value in cell F31 Income to NC Interest 21 Income to NC Interest Value in cell G15 Income to contolling interest Income to contolling interest O 22 Value in cell G17 23 Beg R/E Value in cell G20 200,000 100,000 Beg R/E 24 107,300 103,000 Value in cell 030 Add: Income 37,300 23,000 Add: Income 12,300 20,000 25 Less: Dividends Value in cell 031 30,000 20,000 Less: Dividends 20,000 10,000 26 Ending R/E Value in cell P31 207,300 103,000 Ending R/E 229,600 27 113,000 Value in cell Q17 28 Value in cell Q20 Current assets 50,000 25,000 Current asset 50,000 $5,000 29 Investment in Little 78,300 Investment in Little 84,600 30 PPE 200,000 150,000 PPE 100,000 150,000 31 Acc Dep 45,000 10,000 Acc Dep 60,000 50,000 32 33 Liabilities 56,000 2,000 Liabilities 25,000 12,000 34 CS 20,000 30,000 CS 20,000 30,000 35 RE 207,300 103,000 RE 29,600 113,000 36 NC Interest NC Interest 37 38 39 Sheet1 +