Ch 13 Hw.xlsx - 1 D a 100 percent owned subsidiary of C sold C(Upstream Equipment with a ten year remaining life for \$250 The building had a cost of

# Ch 13 Hw.xlsx - 1 D a 100 percent owned subsidiary of C...

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1. D, a 100 percent owned subsidiary of C sold C (Upstream) Equipment with a ten year remaining life for \$250. The building had a cost of \$600 and accumulated depreciation of \$400. What consolidating entries would be required in order to present their consolidated financial statements in each of the next two years? Transactions recorded at the time of the sale T Cash 250 Acc Dep 400 Building 600 Gain 50 S Building 250 Cash 250 Transactions during each year Dep exp 25 Acc Dep 25 Consolidating entries calculation Cash Building Acc Dep Gain Dep Exp Original 600 -400 Depreciation -20 20 A 600 -420 20 Original 600 -400 Sale 250 -600 400 -50 Purchase -250 250 Depreciation -25 25 B 0 250 -25 -50 25 A-B 0 350 -395 50 -5 Consolidating entry Building 350 Acc Dep 395 Gain 50 Dep exp 5
Consolidating entries calculation yr 2 Cash Building Acc Dep Gain Dep Exp R/E Original 600 -400 Depreciation yr 1 -20 20 Depreciation yr 2 -20 20 A 0 600 -440 0 20 20 Original 600 -400 Sale 250 -600 400 -50 Purchase -250 250 Depreciation yr 1 -25 25 Depreciation yr 2 -25 25 B 0 250 -50 0 25 -25 A-B 0 350 -390 0 -5 45 Consolidating entry yr 2 Building 350 Acc Dep 390 R/E 45 Dep exp 5
2. NN purchased a building on January 1, 2014 for \$300,000. They allocated 20 percent of the

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Unformatted text preview: total cost to the land and the other 80 percent to the building. They determined the building had a 20 year life. On July 1, 2018 NN sold the building to OO, an 80 percent owned subsidiary for \$279,250. OO allocated \$70,000 of the purchase price to the land and the remainder to the building. They also retained NN’s original estimate for when the building would have to be retired. Determine the consolidating entries required for 2019 as a result of this transaction. Building 240000 land 60000 sale 279250 A/D 54000 Dep NN 12000 Dep OO 13950 Cash Building Land A/D Invest in OO Dep Exp R/E Original 240000-54000 Dep Yr 1-6000 6000 Dep Yr 2-12000 12000 A 240000-72000 12000 6000 Original 240000 60000-54000 Sale 279250-240000-60000 54000-33250 Purchase-279250 209250 70000 Dep Yr 1-13950 13950 Dep Yr 2-13950 13950 B 209250 70000-27900-33250 13950 13950 A-B 30750-70000-44100 33250-1950-7950 Journal entries Building 30750 Inv in OO 33250 Land 70000 A/D 44100 Dep exp 1950 R/E 7950...
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