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P Company owns 70% of the outstanding stock of S Company. On January 1, 2011, S Company sold land to P Company for $280,000. S had originally purchased the land on March 30, 2007, for $330,000.

P Company plans to construct a building on the land bought from S in which it will house new production machinery. The estimated useful life of the building and the new machinery is 20 years.

To solve: Prepare all journal entries for P and S (from initial purchase of land from 3rd parties to sale between the related parties). In addition, prepare the w/p entry to eliminate the intercompany sale of land

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92772123

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