Downstream Intercompany Equipment Transactions On July 1, 2018, Pearl Industries sold administrative equipment with a book value of $1,000,000 to its subsidiary, Shiek Shoes, for $800,000. At the date of sale, the equipment had a remaining life of five years. It is being straight-line depreciated on Shiek’s books. It is now December 31, 2020, the end of the accounting year, and you are preparing the working paper to consolidate the trial balances of Pearl and Shiek. Shiek still owns the equipment. (c) Now assume that Shiek sells the equipment to an outside party for $400,000 on January 1, 2022.     What is the consolidated gain on the sale of equipment? $Answer    What is the gain reported by Shiek? $Answer     Prepare the required eliminating entries for the December 31, 2022 consolidation working  paper.

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Indigo Company is in the process of preparing its financial statements for 2020. Assume that no entries for depreciation have been recorded in 2020. The following information related to depreciation of fixed assets is provided to you. 1. 2. 3. 2019 2018 Straight-line $29.700 $29,700 Declining-balance 52.800 66,000 (a) Indigo purchased equipment on January 2, 2017, for $89,600. At that time, the equipment had an estimated useful life of 10 years with a $4,600 salvage value. The equipment is depreciated on a straight-line basis. On January 2, 2020, as a result of additional information, the company determined that the equipment has a remaining useful life of 4 years with a $2,800 salvage value 1. During 2020, Indigo changed from the double-declining-balance method for its building to the straight-line method. The building originally cost $330,000. It had a useful life of 10 years and a salvage value of $33,000. The following computations present depreciation on both bases for 2018 and…

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View Policies Current Attempt in Progress Larkspur Inc. owns a building with a carrying amount of $1.60 million as at January 1, 2023. On that date. Larkspur's management determined that the building's location is no longer suitable for the company's operations and decided to dispose of the building by sale. Larkspur is preparing financial statements for the fiscal year ended December 31, 2023. As at that date, management had an authorized plan in place to sell the building, the building met all criteria for classification as held for sale, and the building's estimated fair value less costs to sell was $0.48 million. The building's depreciation expense for 2023 would amount to $160,000. (a) Prepare the journal entry required on December 31, 2023. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts. List debit entry before credit entry) Date…

Question 2: Fill in the missing information in the Asset disposal account below: UpTown Enterprises is a registered vat vendor. Uptown Enterprises purchased Machinery on 1 June 2021 for R45 885 inclusive of vat. This machinery was sold on 1 December 2022 for R40 250s cash. Machinery is depreciated at 20% on cost. Vat of 15% applies to all transactions. The financial year end is 28 February 2023. (Round all answers to the nearest rand) Amounts include Vat unless stated otherwise. Dr Date 2023 Feb 28 Details A I Fol. Amount GJ B H G General Ledger Date Asset Disposal 2023 Feb 28 Feb 28 Details с E Fol. GJ CB R CR Amount D F G