B- Panda Corporation purchased 75% of Saratoga Industries' common stock on January 2, 2019. On January...
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B- Panda Corporation purchased 75% of Saratoga Industries' common stock on January 2, 2019. On January 1, 2020, Saratoga sold equipment to Panda that had a net book value of $40,000 and an original cost of $60,000 for $50,000. On January 1, 2020, Panda sold a building to Saratoga that had a net book value of $500,000 and an original cost of $625,000 for $750,000. The equipment had a remaining useful life of 8 years, and the building had a remaining useful life of 20 years. Neither asset had salvage value. Both companies use straight-line depreciation. Selected account balances are shown below for Panda and Saratoga for the year ended December 31, 2020: Panda $700,000 450,000 150,000 1,400,000 790,000 250,000 Saratoga $690,000 250,000 75,000 Sales Cost of Goods Sold Other Expenses Building - net Equipment - net Gain on sale 712,500 467,500 10,000 Required: 1. Calculate the following balances for the year ended December 31, 2020: a. Consolidated "Other Expenses" b. Consolidated Buildings c. Consolidated Equipment 2. Calculate consolidated net income and controlling share of consolidated net income for 2020. 3. Prepare consolidation working paper entry to eliminate Income from subsidiary-parent share. No dividends were declared or paid. Marks) (15.4 B- Panda Corporation purchased 75% of Saratoga Industries' common stock on January 2, 2019. On January 1, 2020, Saratoga sold equipment to Panda that had a net book value of $40,000 and an original cost of $60,000 for $50,000. On January 1, 2020, Panda sold a building to Saratoga that had a net book value of $500,000 and an original cost of $625,000 for $750,000. The equipment had a remaining useful life of 8 years, and the building had a remaining useful life of 20 years. Neither asset had salvage value. Both companies use straight-line depreciation. Selected account balances are shown below for Panda and Saratoga for the year ended December 31, 2020: Panda $700,000 450,000 150,000 1,400,000 790,000 250,000 Saratoga $690,000 250,000 75,000 Sales Cost of Goods Sold Other Expenses Building - net Equipment - net Gain on sale 712,500 467,500 10,000 Required: 1. Calculate the following balances for the year ended December 31, 2020: a. Consolidated "Other Expenses" b. Consolidated Buildings c. Consolidated Equipment 2. Calculate consolidated net income and controlling share of consolidated net income for 2020. 3. Prepare consolidation working paper entry to eliminate Income from subsidiary-parent share. No dividends were declared or paid. Marks) (15.4
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1a Equipment has a net book value in the book of saratoga 40000 on 1 Jan 2020 In consolidated financial statement building will be on the same value a... View the full answer
Related Book For
Fundamentals of Advanced Accounting
ISBN: 978-0077862237
6th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
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