In working paper eliminations (in journal entry format) for the intercompany gain in a depreciable plant asset subsequent to the year in which the asset was sold, the credits to the acquirer's Plant Assets and Depreciation Expense ledger accounts always are the same for each year.

Question

Quizplus · Accepted Answer

The credits to the acquirer's Plant Assets and Depreciation Expense ledger accounts vary each year because the depreciation expense is calculated based on the adjusted book value of the asset, which decreases annually due to depreciation.

In Working Paper Eliminations (In Journal Entry Format) for the Intercompany