Company X and Company Z are related companies subject to consolidation. On 1/1/19, Company X sold machinery to Company Z for $50,000 cash that had an original purchase price of $150,000, useful life of 10 years, accumulated depreciation at the time of sale of $60,000, and was expected to be continued to be depreciated at $15,000 per year had it not been sold. Company Z placed the machine in service on 1/1/19, and is depreciating it over 2 years using straight-line depreciation. The portion of the elimination entry at the time of consolidation to account for any required adjustment to the equipment account would be:

Question 19 options:

a)	Debit to Equipment of $100,000

b)	Debit to Equipment of $50,000

c)	Credit to Equipment of $50,000

d)	Credit to Equipment of $100,000

Company R purchased 100% of the outstanding common stock of Company S for $1,500,000. The FMV of the net assets of Company S was $1,400,000, and the BV of the net assets of Company S was $1,300,000. The amount of gain recognized by Company S on this transaction would be:

Question 22 options:

a)

$200,000

b)

$100,000

c)

$0

d)	$1,500,000

Answer rating: 100% (QA)

Answer Q 1 Debit to Equipment of 100000 Explanation We have to eliminate any effect of that transa... View the full answer