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ACT 470 Module 04 Assignment

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Question;Assume that Parent Company decides to sell Equipment (Cost = $10,000, Accumlated Depreciation = $1,000) to Sub for $20,000cash. Show the sale and the subsequent elimination entries by Parent CompanySale by ParentParent Company Balance SheetAssets, Liabilities & EquitiesCashARInventoryLandEquipmentAccumulated DepreciationPatentTotal AssetsAPCommon StockAdditional Paid In CapitalRetained EarningsTotal Liabilities & EquityBook Value$1,500,000$10,000$200,000$640,000$400,000-$150,000Account$0$2,600,000$100,000$450,000$600,000$1,450,000$2,600,000AccountSub Company Balance SheetAssets, Liabilities & EquitiesBook ValueCash$35,000AR$10,000Inventory$65,000Land$40,000PP&E$400,000Accumulated Depreciation-$150,000Patent$0Total Assets$400,000AP$100,000Common Stock$100,000Additional Paid In Capital$50,000Retained Earnings$150,000Total Liabilities & Equity$400,000Assume that book Value = Fair ValueDRCRDRCRDRCRAcquisition by SubElimination Entries by ParentAccount

 

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