Business, 08.07.2020 04:01 hflores0001

On January 1, 20X4, Gold Company purchased a computer with an expected economic life of five years. On January 1, 20X6, Gold sold the computer to TLK Corporation and recorded the following entry: Cash 39,000
Accumulated Depreciation 16,000
Computer Equipment 40,000
Gain on Sale of Equipment 15,000

T LK Corporation holds 60 percent of Gold's voting shares. Gold reported net income of $45,000, and T LK reported income from its own operations of S85,000 for There is no change in the estimated economic life of the equipment as a result of the intercorporate transfer.

1. In the preparation of the 20X6 consolidated income statement, depreciation expense will be:

a. Debited for $5,000 in the eliminating entries.
b. Credited for $5,000 in the eliminating entries.
c. Debited for $13,000 in the eliminating entries.
d. Credited for $13,000 in the eliminating entries.

2. In the preparation of the 20X6 consolidated balance sheet, computer equipment will be:

a. Debited for $1,000.
b. Debited for $15,000.
c. Credited for $24,000.
d. Debited for $40,000.

3. Income assigned to the noncontrolling interest in the 20X6 consolidated income statement will be:

a.$12,000.
b.$14,000.
c.$18,000.
d.$52,000.

4. Consolidated net income for will be:
a. $106,000.
b. $112,000.
c. $120,000.
d. $130,000.

Answers: 1

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