Use the following information to answer the question(s) below.

On January 1, 2012, Shrimp Corporation purchased a delivery truck with an expected useful life of five years, and a salvage value of $8,000. On January 1, 2014, Shrimp sold the truck to Pacet Corporation. Pacet assumed the same salvage value and remaining life of three years used by Shrimp. Straight-line depreciation is used by both companies. On January 1, 2014, Shrimp recorded the following journal entry:

-In the eliminating/adjusting entries on consolidation working papers for 2014,the Truck account was

Question

Use the following information to answer the question(s) below.

On January 1, 2012, Shrimp Corporation purchased a delivery truck with an expected useful life of five years, and a salvage value of $8,000. On January 1, 2014, Shrimp sold the truck to Pacet Corporation. Pacet assumed the same salvage value and remaining life of three years used by Shrimp. Straight-line depreciation is used by both companies. On January 1, 2014, Shrimp recorded the following journal entry:

-In the eliminating/adjusting entries on consolidation working papers for 2014,the Truck account was

Quizplus · Accepted Answer

The entry to eliminate the Truck account on consolidation working papers would require a credit to the Truck account for the amount of the intercompany sale (assuming the sale was made by one subsidiary to another). Therefore, the Truck account would be credited for $15,000 (the amount of the sale), and the corresponding entry would be a debit to the account that purchased the Truck.

Use the Following Information to Answer the Question(s) Below