Question: Please answer the incorrect errors asap Preparing the [i] consolidation journal entries for sale of depreciable assets - Equity method Assume on January 1, 2017,
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Preparing the [i] consolidation journal entries for sale of depreciable assets - Equity method Assume on January 1, 2017, a wholly owned subsidiary sells to its parent, for a sale price of $132.000, equipment that originally cost $180,000. The subsidiary originally purchased the equipment on January 1, 2013, and depreciated the equipment assuming a 12-year useful life (straight-line with no salvage value). The parent has adopted the subsidiary's depreciation policy and depreciates the equipment over the remaining useful life of 8 years. The parent uses the equity method to account for its Equity Investment. a. Compute the annual pre-consolidation depreciation expense for the subsidiary (pre-intercompany sale) and the parent (post-intercompany sale). Annual depreciation expense subsidiary S 15,000 Annual depreciation expense parent $ 16.500 b. Compute the pre-consolidation Gain on Sale recognized by the subsidiary during 2017. $ 12.000 c. Prepare the required [l] consolidation journal entry in 2017 (assume a full year of depreciation). Credit Consolidation Worksheet Description Ilgain] Gain on sale of equipment Equipment Accumulated depreciation Equipment lidepl Accumulated depreciation Equipment Depreciation expense Debit 12,000 48,000 60,000 1,500 1,500 d. Now assume that you are preparing the year-end consolidation journal entries for the year ending December 31, 2019. Prepare the required [l] consolidation journal entries during the holding period. Debit Credit Consolidation Worksheet Description Tigain Investment in subsidiary Cquipment Accumulated depreciation-Equipment [ldepl Accumulated depreciation Equipment Depreciation expense 48,000 1,500 1,500 Check Preparing the [i] consolidation journal entries for sale of depreciable assets - Equity method Assume on January 1, 2017, a wholly owned subsidiary sells to its parent, for a sale price of $132.000, equipment that originally cost $180,000. The subsidiary originally purchased the equipment on January 1, 2013, and depreciated the equipment assuming a 12-year useful life (straight-line with no salvage value). The parent has adopted the subsidiary's depreciation policy and depreciates the equipment over the remaining useful life of 8 years. The parent uses the equity method to account for its Equity Investment. a. Compute the annual pre-consolidation depreciation expense for the subsidiary (pre-intercompany sale) and the parent (post-intercompany sale). Annual depreciation expense subsidiary S 15,000 Annual depreciation expense parent $ 16.500 b. Compute the pre-consolidation Gain on Sale recognized by the subsidiary during 2017. $ 12.000 c. Prepare the required [l] consolidation journal entry in 2017 (assume a full year of depreciation). Credit Consolidation Worksheet Description Ilgain] Gain on sale of equipment Equipment Accumulated depreciation Equipment lidepl Accumulated depreciation Equipment Depreciation expense Debit 12,000 48,000 60,000 1,500 1,500 d. Now assume that you are preparing the year-end consolidation journal entries for the year ending December 31, 2019. Prepare the required [l] consolidation journal entries during the holding period. Debit Credit Consolidation Worksheet Description Tigain Investment in subsidiary Cquipment Accumulated depreciation-Equipment [ldepl Accumulated depreciation Equipment Depreciation expense 48,000 1,500 1,500 Check
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