Fred Corporation owns 75 percent of Winner Company's voting shares,acquired on March 21,20X5,at book value.At that date,the fair value of the noncontrolling interest was equal to 25 percent of the book value of Winner Company.
On January 1,20X4,Fred paid $150,000 for equipment with a 10-year expected total economic life.The equipment was depreciated on a straight-line basis with no residual value.Winner purchased the equipment from Fred on December 31,20X6,for $140,000.Winner sold land it had purchased for $75,000 on February 18,20X4,to Fred for $60,000 on October 10,20X7.
Required: Prepare the consolidation entries for 20X8 related to the sale of depreciable assets and land if Fred uses the fully adjusted equity method to account for its investment in Winner.

Problem 54 (continued):

Question

Fred Corporation owns 75 percent of Winner Company's voting shares,acquired on March 21,20X5,at book value.At that date,the fair value of the noncontrolling interest was equal to 25 percent of the book value of Winner Company.
On January 1,20X4,Fred paid $150,000 for equipment with a 10-year expected total economic life.The equipment was depreciated on a straight-line basis with no residual value.Winner purchased the equipment from Fred on December 31,20X6,for $140,000.Winner sold land it had purchased for $75,000 on February 18,20X4,to Fred for $60,000 on October 10,20X7.
Required: Prepare the consolidation entries for 20X8 related to the sale of depreciable assets and land if Fred uses the fully adjusted equity method to account for its investment in Winner.
  
Problem 54 (continued):

Quizplus · Accepted Answer

The Answer of Fred Corporation owns 75 percent of Winner Company's voting shares,acquired on March 21,20X5,at book value.At that date,the fair value of the noncontrolling interest was equal to 25 percent of the book value of Winner Company.
On January 1,20X4,Fred paid $150,000 for equipment with a 10-year expected total economic life.The equipment was depreciated on a straight-line basis with no residual value.Winner purchased the equipment from Fred on December 31,20X6,for $140,000.Winner sold land it had purchased for $75,000 on February 18,20X4,to Fred for $60,000 on October 10,20X7.
Required: Prepare the consolidation entries for 20X8 related to the sale of depreciable assets and land if Fred uses the fully adjusted equity method to account for its investment in Winner.
  
Problem 54 (continued):

Fred Corporation Owns 75 Percent of Winner Company's Voting Shares,acquired