ch07 - Exercise 7-3 Cost of equipment $ 300,000 Accumulated...

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Unformatted text preview: Exercise 7-3 Cost of equipment $ 300,000 Accumulated Depreciation ($300,000 × . 1 0 × 5 years) 150,000 Book value 1/1 2004 150,000 Proceeds from sale 200,000 Gain on sale $ 50,000 Part A 2004 (1) Equipment ($300,000 - $200,000) 100,000 Gain on Sale of Equipment 50,000 Accumulated Depreciation($300,000)(5/10) 150,000 (2) Accumulated Depreciation – Equipment 10,000 Depreciation Expense ($50,000/5) 10,000 2005 (1) Equipment 100,000 Beginning Retained Earnings – Pearson (.9 × $50,000) 45,000 Beginning Retained Earnings – Spring (.1 × $50,000) 5,000 Accumulated Depreciation – Equipment 150,000 (2) Accumulated Depreciation – Equipment 20,000 Depreciation Expense 10,000 Beginning Retained Earnings – Pearson (.9 × $10,000) 9,000 Beginning Retained Earnings – Spring (.10 × $10,000) 1,000 Part B Consolidated Net Income for 2005 = $150,000 + .9($100,000 + $10,000) = $249,000 Exercise 7-4 Part A 2004 Land 350,000 Cash 350,000 2005 None. No further entries are recorded on the books of Procter Company unless and until the None....
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ch07 - Exercise 7-3 Cost of equipment $ 300,000 Accumulated...

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