Sky Corporation owns 75 percent of Earth Company\'s stock. On July 1, 20X8, Sky
ID: 2465543 • Letter: S
Question
Sky Corporation owns 75 percent of Earth Company's stock. On July 1, 20X8, Sky sold a building to Earth for $33,000. Sky had purchased this building on January 1, 20X6, for $36,000. The building's original eight-year estimated total economic life remains unchanged. Both companies use straight-line depreciation. The equipment's residual value is considered negligible.
15.
Required information
Based on the information provided, in the preparation of the 20X8 consolidated financial statements, building will be _____ in the eliminating entries.
debited for $33,000
debited for $36,000
credited for $36,000
debited for $3,000
16.
Required information
Based on the information provided, the gain on sale of the building eliminated in the consolidated financial statements for 20X8 is:
$8,250.
$10,500.
$6,000.
$11,250.
17.
Required information
Based on the information provided, in the preparation of the 20X9 consolidated income statement, depreciation expense will be:
debited for $750 in the eliminating entries.
credited for $750 the eliminating entries.
credited for $1500 in the eliminating entries.
debited for $1500 in the eliminating entries.
Please show how you get the answers, many thanks!!
Explanation / Answer
Sky Earth Cash 33000 Building 33000 To building 24750 To Cash 33000 To gain 8250 15 option d 16 option a 17 option c (3000/6)+500 ie =1500
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