In the preparation of the 20x4 consolidated income statement, depreciation expense will be: A. Debited for 5,000 in eliminating entriesB. Credited for 5,000 in eliminating entriesC. Debited for 13,000 in eliminating entriesD. Credited for 13,000 in eliminating entries On January 1, 20x2, Gold Company purchased a computer with an expected economic life of five years.OnJanuary 1, 20x4, Gold sold the computer to TLK Corporation and recorded the following entry:Cash39,00016,000Accumulated DepreciationComputer EquipmentGain on sale of equipment40,00015,000TLK Corporation holds 60 percent of Gold's voting shares. Gold reported net income of P45,000, and TLKreportedincome from its own operations of P85,000 for 20x4. There is no change in the estimated life ofthe equipment as a result of the inter-corporate transfer.

In the preparation of the 20x4 consolidated income statement, depreciation expense will be: A. Debited for 5,000 in eliminating entries B. Credited for 5,000 in eliminating entries C. Debited for 13,000 in eliminating entries D. Credited for 13,000 in eliminating entries

In the preparation of the 20x4 consolidated income statement, depreciation expense will be: A. Debited for 5,000 in eliminating entries B. Credited for 5,000 in eliminating entries C. Debited for 13,000 in eliminating entries D. Credited for 13,000 in eliminating entries

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 11MCQ

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On January 1, 20x2, Gold Company purchased a computer with an expected economic life of five years. On January 1, 20x4, Gold sold the computer to TLK Corporation and recorded the following entry: Cash 39,000 Accumulated Depreciation 16,000 Computer Equipment 40,000 Gain on sale of equipment 15,000 TLK Corporation holds 60 percent of Gold’s voting shares. Gold reported net income of P45,000, and TLK reported income from its own operations of P85,000 for 20x4. There is no change in the estimated life of the equipment as a result of the inter-corporate transfer. In the preparation of the 20x4 consolidated income statement, depreciation expense will be: A. Debited for 5,000 in eliminating entriesB. Credited for 5,000 in eliminating entriesC. Debited for 13,000 in eliminating entriesD. Credited for 13,000 in eliminating entries
On January 1, 20x2, Gold Company purchased a computer with an expected economic life of five years. On January 1, 20x4, Gold sold the computer to TLK Corporation and recorded the following entry: Cash 39,000 Accumulated Depreciation 16,000 Computer Equipment 40,000 Gain on sale of equipment 15,000 TLK Corporation holds 60 percent of Gold’s voting shares. Gold reported net income of P45,000, and TLK reported income from its own operations of P85,000 for 20x4. There is no change in the estimated life of the equipment as a result of the inter-corporate transfer. In the preparation of the 20x4 consolidated balance sheet, the computer equipment will be: A. Debited for 1,000 C. Credited for 24,000B. Debited for 15,000 D. Debited for 40,000
On January 1, 20x2, Gold Company purchased a computer with an expected economic life of five years. On January 1, 20x4, Gold sold the computer to TLK Corporation and recorded the following entry: Cash 39,000 Accumulated Depreciation 16,000 Computer Equipment 40,000 Gain on sale of equipment 15,000 TLK Corporation holds 60 percent of Gold’s voting shares. Gold reported net income of P45,000, and TLK reported income from its own operations of P85,000 for 20x4. There is no change in the estimated life of the equipment as a result of the inter-corporate transfer. The income assigned to the non-controlling interest in the 20x4 consolidated income statement will amount to: A. 12,000 C. 18,000B. 14,000 D. 52,000
On January 1, 20X5, Spring Company purchased a machine with an expected economic life of ten years. On January 1, 20X8, Spring sold the machine to Peterson Corporation and recorded the following entry: Cash Accumulated Depreciation Machine Gain on Sale of Equipment O $40,000. Account O $28,000. O $32,000. O $140,000. Debit 350,000 120,000 Peterson Corporation holds 80 percent of Spring's voting shares. Spring reported net income of $200,000, and Peterson reported income from its own operations of $380,000 for 20X8. There is no change in the estimated economic life of the equipment as a result of the intercorporate transfer. Based on the preceding information, income assigned to the noncontrolling interest in the 20X8 consolidated income statement will be: Credit 400,000 70,000
On January 1, 20x2, Gold Company purchased a computer with an expected economic life of five years. On January 1, 20x4, Gold sold the computer to TLK Corporation and recorded the following entry: Cash 39,000 Accumulated Depreciation 16,000 Computer Equipment 40,000 Gain on sale of equipment 15,000 TLK Corporation holds 60 percent of Gold’s voting shares. Gold reported net income of P45,000, and TLK reported income from its own operations of P85,000 for 20x4. There is no change in the estimated life of the equipment as a result of the inter-corporate transfer. The consolidated net income for 20x4 will amount to: A. 106,000 C. 120,000B.112,000 D. 130,000
On January 1, 20x4, Gold Company purchased a computer with an expected economic life of five years. On January 1, 20x6, Gold sold the computer to TLK Corporation and recorded the following entry Consolidation Worksheet Entries Cash Accumulated Depreciation Computer Equipment Gain on Sale of Equipment Debit Credit 39,000 16,000 40,000 15,000 TLK Corporation holds 60 percent of Gold's voting shares. Gold reported net income of $ 45,000 including the gain on the sale of equipment, and TLK reported income from its own operations of $ 85,000 for 20x6. There is no change in the estimated economic life of the equipment as a result of the intercompany transfer Consolidated net income for 20X6 will be Multiple Choice O O $130,000 $120,000 $112,000. $106,000
On January 1, 2017, Server Company purchased a machine with an expected economic life of five years. On January 1, 2019, Server sold the machine to Patron Corporation and recorded the following entry: Cash 45,000 Accumulated Depreciation 28,000, Machine 70,000, Gain on Sale of Equipment 3,000. Patron Corporation holds 75 percent of server's voring shares.Server reported a net income of $50,000, and Patron reported income from its own operations of 100,000 for 2019/. There is no change in the economic life of the equipement as a result of the intercorporate tranfer. Based on the preceding information, in the preparation of the 2019 consolidated balance sheet, the machine will be : Debited for 25,000, Credited for 45,000, debited for 1,000, debited for 15,000
Desert Company purchased land by exchanging 25,000 shares of the company's common stock that had a $10 par value. The land was recently appraised for $250,000. Desert's stock is not actively traded on the NYSE but last year a shareholder sold a block of 250 shares at a selling price of $20 per share. What is the original cost of the Land that will be recorded by Desert, Co., on their Balance Sheet?
Akron, Inc., owns all outstanding stock of Toledo Corporation. Amortization expense of $15,000 per year for patented technology resulted from the original acquisition. For 2018, the companies had the following account balances: Akron ToledoSales . . . . . . .. $1,100,000 $600,000Cost of goods sold 500,000 400,000Operating expenses 400,000 220,000Investment income . . Not given –0–Dividends declared . . .80,000 30,000 Intra-entity sales of $320,000 occurred during 2017 and again in 2018. This merchandise cost $240,000 each year. Of the total transfers, $70,000 was still held on December 31, 2017, with $50,000 unsold on December 31, 2018.a. For consolidation purposes, does the direction of the transfers (upstream or downstream) affect the balances to be reported here?b. Prepare a consolidated income statement for the year ending December 31, 2018.
Partners Ltd operates a car manufacturing plant. It has decided to purchase a 100 per cent interest in Sole Ltd, a manufacturing company. The cost of the acquisition is $5,000,000 plus associated legal costs of $10,000. As at the date of acquisition, the statement of financial position of Sole Ltd shows: $ $ $ Assets Current assets Cash 110,000 Accounts receivable 60,000 Provision for doubtful debts (10,000) 50,000 Inventory 140,000 Total current assets 300,000 Non-current assets Buildings, at cost 700,000 Accumulated depreciation—buildings (150,000) 550,000 Plant and equipment 400,000 Acc. depreciation—plant and equipment (100.000) 300,000 Total non-current assets 850,000 Total assets 1,150,000 Liabilities Current liabilities Accounts payable…
Akron, Inc., owns all outstanding stock of Toledo Corporation. Amortization expense of $15,000 per year for patented technology resulted from the original acquisition. For 2021, the companies had the following account balances: Akron Toledo Sales $ 1,100,000 $ 600,000 Cost of goods sold 500,000 400,000 Operating expenses 400,000 220,000 Investment income Not given 0 Dividends declared 80,000 30,000 Intra-entity sales of $320,000 occurred during 2020 and again in 2021. This merchandise cost $240,000 each year. Of the total transfers, $70,000 was still held on December 31, 2020, with $50,000 unsold on December 31, 2021. Prepare a consolidated income statement for the year ending December 31, 2021.
Erica Company had the following property acquisitions during the current year: 1. Acquired a tract of land in exchange for 50,000 ordinary shares with P100 par value and market price of P120 share on the date of acquisition. per The last property tax bill indicated assessed value of P4,500,000 for the land. 2. Received land from a major shareholder as an inducement to locate a plant in the city. No payment was required but the entity paid P50,000 for legal expenses for land transfer. The land is fairly valued at P1,000,000. 3. Purchased for P5,500,000, including appraiser fee of P100,000´a warehouse building and the land on which it is located. The land had an appraised value of P2,000,000 and original cost of P1,400,000. The building had an appraised value of P3,000,000 and original cost of P2,500,000.