On January 1, 2019, S Corp purchased a computer with an expected economic life of 20 years. On January 1, 2021, S Corp sold the computer to T Corp. and recorded the following entry: Debit Cash - 30,000 Accumulated Depreciation - 4,000 Loss on Sale of equipment - 6,000 Credit Computer Equipment - 40,000 S Corp holds 60% of the stocks of T Corp. T Corp reported net income of P45,000 and S Corp reported net income from its own operations of P85,000 in 2021. There is no change in the useful life of the equipment as a result of the intercompany transaction.
On January 1, 2019, S Corp purchased a computer with an expected economic life of 20 years. On January 1, 2021, S Corp sold the computer to T Corp. and recorded the following entry: Debit Cash - 30,000 Accumulated Depreciation - 4,000 Loss on Sale of equipment - 6,000 Credit Computer Equipment - 40,000 S Corp holds 60% of the stocks of T Corp. T Corp reported net income of P45,000 and S Corp reported net income from its own operations of P85,000 in 2021. There is no change in the useful life of the equipment as a result of the intercompany transaction.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 11E: On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an...
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