Company A holds 70 percent of the voting shares of Company B.During 20X8,Company B sold land with a book value of $125,000 to Company A for $150,000.Company A continues to hold the land at the end of the year.The companies file separate tax returns and are subject to a 40 percent tax rate.Assume that Company A uses the fully adjusted equity method in accounting for its investment in Company B.
-Assume the Company A holds the land at the end of 20X9.The eliminating entry relating to the intercorporate sale of land to be entered in the consolidation worksheet prepared at the end of 20X9 will include a debit to Investment in Company B for:
A) $4,500.
B) $7,500.
C) $15,000.
D) $10,500.
Correct Answer:
Verified
Q29: Pony Corporation acquired 90 percent of Saddle
Q36: On January 1, 20X8, Gulfstream Corporation acquired
Q39: Company A holds 70 percent of the
Q40: Catalyst Corporation acquired 90 percent of Trigger
Q41: Plush Corporation holds 80 percent of Scratch
Q41: Power Corporation owns 75 percent of Transmitter
Q42: Locus Corporation acquired 80 percent ownership of
Q47: Pappas Company owns 85 percent of Sunny
Q49: Pain Corporation holds 90 percent of Soothing
Q51: Plush Corporation holds 80 percent of Scratch
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents