Pitcher Corporation purchased 60 percent of Softball Corporation's voting common stock on January 1, 20X1. On January 1, 20X5, Pitcher received $213,000 from Softball for a truck Pitcher had purchased on January 1, 20X2, for $273,000. 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. Prepare the worksheet consolidation entry or entries needed at December 31, 20X5, to remove the effects of the intercompany sale. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. view transaction list Consolidation Worksheet Entries < A B Record the entry to eliminate the gain on the truck and to correct the asset's basis. Note: Enter debits before credits. Event 1 Accounts Debit Credit Record entry Clear entry view consolidation entries > b. Prepare the worksheet consolidation entry or entries needed at December 31, 20X6, to remove the effects of the intercompany sale. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. view transaction list Consolidation Worksheet Entries < A B >
Pitcher Corporation purchased 60 percent of Softball Corporation's voting common stock on January 1, 20X1. On January 1, 20X5, Pitcher received $213,000 from Softball for a truck Pitcher had purchased on January 1, 20X2, for $273,000. 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. Prepare the worksheet consolidation entry or entries needed at December 31, 20X5, to remove the effects of the intercompany sale. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. view transaction list Consolidation Worksheet Entries < A B Record the entry to eliminate the gain on the truck and to correct the asset's basis. Note: Enter debits before credits. Event 1 Accounts Debit Credit Record entry Clear entry view consolidation entries > b. Prepare the worksheet consolidation entry or entries needed at December 31, 20X6, to remove the effects of the intercompany sale. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. view transaction list Consolidation Worksheet Entries < A B >
Chapter9: Acquisitions Of Property
Section: Chapter Questions
Problem 26P
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Transcribed Image Text:Pitcher Corporation purchased 60 percent of Softball Corporation's voting common stock on January 1, 20X1. On January 1, 20X5,
Pitcher received $213,000 from Softball for a truck Pitcher had purchased on January 1, 20X2, for $273,000. 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. Prepare the worksheet consolidation entry or entries needed at December 31, 20X5, to remove the effects of the intercompany
sale.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
view transaction list
Consolidation
Worksheet Entries
< A
B
Record the entry to eliminate the gain on the truck and to correct the asset's
basis.
Note: Enter debits before credits.
Event
1
Accounts
Debit
Credit
Record entry
Clear entry
view consolidation entries
>
b. Prepare the worksheet consolidation entry or entries needed at December 31, 20X6, to remove the effects of the intercompany
sale.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
view transaction list
Consolidation
Worksheet Entries
< A
B
>
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