Pam Corporation owns 70 percent ownership of Spray Enterprises. On December 31, 20X6, Spray paid Pam $29,500 for a truck that Pam had purchased for $34,500 on January 1, 20X2. The truck was considered to have a useful life of 15 years from 1 January 20X2 and no residual value. Both companies depreciate equipment using the straight-line method.

Required:
a. Prepare the necessary worksheet consolidation entry(s) on December 31, 20X6 to eliminate the effects of the intercompany sale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b. Prepare the necessary worksheet consolidation entry(s) on December 31, 20X7 to eliminate the effects of the intercompany sale. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Pitcher Corporation purchased 60 per cent of Softball Corporation's voting common stock on January 1, 20X1. On December 31, 20X5, Pitcher received $243,000 from Softball for a truck that Pitcher had purchased on January 1, 20X2 for $303,000. The truck is expected to have a useful life of 10 years and has no salvage value. Both companies depreciate the trucks in a straight line.

Required:
a. Prepare the necessary worksheet consolidation entry(s) at 31 December 20X5 to eliminate the effects of the intercompany sale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b. Prepare the necessary worksheet consolidation entry(s) as of December 31, 20X6 to eliminate the effects of the intercompany sale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer rating: 100% (QA)

a Prepare the necessary worksheet consolidation entrys on December 31 20X6 to eliminate the effects of the intercompany sale In this case Pam Corporat... View the full answer