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Mortar Corporation acquired 80 percent of Granite Corporation's voting common stock on January 1, 2007. On December 31, 2008, Mortar received $390,000 from Granite for a equipment Mortar had purchased on January 1, 2005, for $400,000. The equipment is expected to have a 10-year useful life and no salvage value. Both companies depreciate equipments on a straight-line basis.

Required:

Based on the preceding information:

A) Calculate the amount to be debited or credited for equipment during the preparation of the 2008 consolidated financial statements.

B) Calculate the gain on sale of the equipment recorded by Mortar for 2008 is:

C) Calculate the amount to be debited or credited for equipment during the preparation of the 2009 consolidated financial statements.

D) Calculate the amount to be debited or credited for depreciation expense to be shown in the preparation of the 2009 consolidated income statements.

E) Calculate the amount of accumulated depreciation to be debited or credited in the preparation of the 2009 consolidated balance sheet.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9445677

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