1. Southern Materials owns 75 percent of Western Furnitures common stock. On
December 31, 2005, Southern sells a machine costing $65,000 with $15,000 accumulated
depreciation at the date of sale to Western for $36,000. What amount will be debited in
Consolidated Financial Statements :
Scope of Chapter
This chapter describes and illustrates the accounting and working paper eliminations
for related party transactions between a parent company and its subsidiaries.
After consolidated financial statements have been completed, both the parent company and its
subsidiaries prepare and post closing entries, to complete the accounting cycle for the year.
The closing entries on December 31,