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Padre holds 100 percent of the outstanding shares of Sonora. On January 1, 2013, Padre transferred equipment to Sonora for $112,000. The equipment had cost $147,000 originally but had a $57,000 book value and five-year remaining life at the date of transfer. Depreciation expense is computed according to the straight-line method with no salvage value.
Consolidated financial statements for 2015 currently are being prepared. What worksheet entries are needed in connection with the consolidation of this asset? Assume that the parent applies the partial equity method. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
prepare journal entry TA
Prepare entry ED

Sagot :

Tundexi

Answer:

                          Journal Entry TA

Date   Account Titles                      Debit       Credit

           Retained Earnings             $33,000

           Equipment                          $35,000

           ($147,000 - $112000)

                  Accumulated Depreciation           $68,000

                  [(147000-57000)+(57000/5*2)-(112000/5*2)]

                          Journal Entry ED

Date   Account Titles                       Debit       Credit

          Accumulated Depreciation   $11000

          [(112000-57000)/5]

                  Depreciation expense                  $11,000

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