The following information relates to land sales between a parent and its subsidiary.
•In 2018, the parent sold land to its subsidiary at a gain of $5,000. The subsidiary still holds the land at the end of 2020.
•In 2019, the subsidiary sold land at a gain of $3,000 to the parent. The parent sold the land at a gain of $12,000 in 2020.
•In 2019, the subsidiary sold land to its subsidiary at a loss of $9,000. The parent still holds the land at the end of 2020.
•In 2020, the parent sold land to the subsidiary at a gain of $2,000. The subsidiary sold the land in 2020, recording a gain of $3,500.
Required
Prepare the eliminating entries (I) for the 2020 consolidation working paper for the above intercompany transactions.

Question

Quizplus · Accepted Answer

The Answer of The following information relates to land sales between a parent and its subsidiary.
•In 2018, the parent sold land to its subsidiary at a gain of $5,000. The subsidiary still holds the land at the end of 2020.
•In 2019, the subsidiary sold land at a gain of $3,000 to the parent. The parent sold the land at a gain of $12,000 in 2020.
•In 2019, the subsidiary sold land to its subsidiary at a loss of $9,000. The parent still holds the land at the end of 2020.
•In 2020, the parent sold land to the subsidiary at a gain of $2,000. The subsidiary sold the land in 2020, recording a gain of $3,500.
Required
Prepare the eliminating entries (I) for the 2020 consolidation working paper for the above intercompany transactions.

The Following Information Relates to Land Sales Between a Parent