X-Beams Inc. owned 70% of the voting common stock of Kent Corp. During 2011, Kent made several sales of
inventory to X-Beams. The total selling price was $180,000 and the cost was $100,000. At the end of the year, 20%
of the goods were still in X-Beams' inventory. Kent's reported net income was $300,000. What was
Justings Co. owned 80% of Evana Corp. During 2011, Justings sold to Evana land with a book value of $48,000. The
selling price was $70,000. In its accounting records, Justings should
not recognize a gain on the sale of the land since it was made to a related party.
recognize a gain of $17,600.
defer recognition of the gain until Evana sells the land to a third party.
recognize a gain of $8,000.
recognize a gain of $22,000.
Norek Corp. owned 70% of the voting common stock of Thelma Co. On January 2, 2010, Thelma sold a parcel of
land to Norek. The land had a book value of $32,000 and was sold to Norek for $45,000. Thelma's reported net
income for 2010 was $119,000. What is the
Clemente Co. owned all of the voting common stock of Snider Co. On January 2, 2010, Clemente sold equipment to
Snider for $125,000. The equipment had cost Clemente $140,000. At the time of the sale, the balance in
accumulated depreciation was $40,000. The equipment had a remaining useful life of five years and a $0 salvage
value. Straight-line depreciation is used by both Clemente and Snider.
0 out of
At what amount should the equipment (net of depreciation) be included in the consolidated balance sheet dated
December 31, 2010?