Using the data in the option 1 spreadsheet linked at the

Question

Assignment Option: Intercompany Transactions - Equipment

Using the data in the Option 1 Spreadsheet (linked at the bottom of the page), perform the accounting required for the elimination of each independent intercompany transaction:

Prepare the book calculations

Perform the required journal entries

Assume that Parent Company decides to sell Equipment (Cost = $10,000, Accumlated Depreciation = $1,000) to Sub for $20,000 cash. Show the sale and the subsequent elimination entries by Parent Company
Parent Company Balance Sheet			Sale by Parent
Assets, Liabilities & Equities	Book Value		Account	DR	CR
Cash	$1,500,000
AR	$10,000
Inventory	$200,000
Land	$640,000
Equipment	$400,000
Accumulated Depreciation	-$150,000
			Acquisition by Sub
Patent	$0		Account	DR	CR
Total Assets	$2,600,000
AP	$100,000
Common Stock	$450,000
Additional Paid In Capital	$600,000
Retained Earnings	$1,450,000		Elimination Entries by Parent
Total Liabilities & Equity	$2,600,000		Account	DR	CR
Sub Company Balance Sheet
Assets, Liabilities & Equities	Book Value
Cash	$35,000
AR	$10,000
Inventory	$65,000
Land	$40,000
PP&E	$400,000
Accumulated Depreciation	-$150,000
Patent	$0
Total Assets	$400,000
AP	$100,000
Common Stock	$100,000
Additional Paid In Capital	$50,000
Retained Earnings	$150,000
Total Liabilities & Equity	$400,000
Assume that book Value = Fair Value