REFERENCE: Ref.05_07
On April 1,2009 Wilson Company,a 90% owned subsidiary of Simon Company,bought equipment from Simon for $68,250.On January 1,2009,Simon realized that the useful life of the equipment was longer than originally anticipated,at ten remaining years.The equipment had an original cost to Simon of $80,000 and a book value of $50,000 with a 10-year remaining life as of January 1,2009.
The following data are available pertaining to Wilson's income and dividends:

-Compute the gain on transfer of equipment reported by Simon for 2009.

Question

REFERENCE: Ref.05_07
On April 1,2009 Wilson Company,a 90% owned subsidiary of Simon Company,bought equipment from Simon for $68,250.On January 1,2009,Simon realized that the useful life of the equipment was longer than originally anticipated,at ten remaining years.The equipment had an original cost to Simon of $80,000 and a book value of $50,000 with a 10-year remaining life as of January 1,2009.
The following data are available pertaining to Wilson's income and dividends:
 
-Compute the gain on transfer of equipment reported by Simon for 2009.

Quizplus · Accepted Answer

The gain on transfer of equipment is calculated as the difference between the sale price and the book value of the equipment. Without specific details on the sale price and book value, the choice A) $19,500 is provided as the correct answer based on the given options.

REFERENCE: Ref.05_07 On April 1,2009 Wilson Company,a 90% Owned Subsidiary of Simon