Cash a computer with an exp cted economic life of five years On January 1, 20X5, Gold sold the computer to TLK Corporation and recorded the following entry Consolidation Worksheet Entries Credit Accumulated Depreciation Computer Equipment Gain on Sale of Equipment Debit 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

SWFT Comprehensive Volume 2019
42nd Edition
ISBN:9780357233306
Author:Maloney
Publisher:Maloney
Chapter14: Property Transactions: Capital Gains And Losses, § 1231, And Recapture Provisions
Section: Chapter Questions
Problem 75P
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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
Transcribed Image Text: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
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