Assignment
1. Frazer Corporation purchased 60 percent of Minnow Corporation's voting common stock on January 1, 20X1. On December 31, 20X1 Frazer received $210,000 from Minnoq for a truck. Frazer had purchased on January 1, 20X2, for $300,000. The truck is expected to have a 10-year useful life and no salvage value. Both companies depreciate trucks on a straight-line basis.
Required:
a. Give the worksheet eliminating entry or entries needed at December 31, 20X5, to remove the effects of the inter company sale.
b. Give the worksheet eliminating entry or entries needed at December 31, 20X6, to remove the effects of the intercompany sale.
2. Transfer of Depreciable Asset at Beginning of Year
Frazer Corporation purchased 60 percent of Minnow Corporation's voting common stock on January 1, 20X1. On January 1, 20X5, Frazer received $245,000 from Minnow for a truck Frazerhad purchased on January 1, 20X2, for $300,000. The truck is expected to have a 10-year usefullife and no salvage value. Both companies depreciate trucks on a straight-line basis.
Required
a. Give the worksheet eliminating entry or entries needed at December 31, 20X5, to remove the effects of the intercompany sale.
b. Give the worksheet eliminating entry or entries needed at December 31, 20X6, to remove the effects of the intercompany sale.