A parent entity group sold a depreciable non-current asset to a subsidiary entity for $2800.The asset originally cost $3000 and at the date of sale accumulated depreciation was $500.The amount of the unrealised gain on sale to be eliminated is:

Question

Quizplus · Accepted Answer

The unrealised gain is the difference between the sale price and the carrying amount of the asset. The carrying amount is the original cost ($3000) minus accumulated depreciation ($500), which equals $2500. The sale price is $2800, so the unrealised gain is $2800 - $2500 = $300.

A Parent Entity Group Sold a Depreciable Non-Current Asset to a Subsidiary