Neptune Corporation owns 70 percent of Pluto Company's stock. On July 1, 20X4, Neptune sold a piece of equipment to Pluto for $56,350. Neptune had purchased this equipment on January 1, 20X1, for $63,000. The equipment's original 15-year estimated total economic life remains unchanged. Both companies use straight-line depreciation. The equipment's residual value is considered negligible.

Based on the information provided, the gain on the sale of equipment eliminated in the consolidated financial statements for 20X4 is

A. $5950

B. $8050

C. $10150

D. $14700

 

Based on the information provided, while preparing the 20X4 condolidated income statement, depreciation expense will be:

A. credited for $350.

B. debited for $350.

C. credited for $700

D. debited for $700.

Answer rating: 100% (QA)

Required solution Ans 1 Option 8050 Equipment Cost as on ... View the full answer