Prepare the consolidation worksheet adjustment journal entry on December 31, 2005, concerning the intercompany sale of land
Prepare the consolidation worksheet adjustment journal entry on December 31, 2005, concerning the intercompany sale of land
Chapter6: Corporations: Redemptions And Liquidations
Section: Chapter Questions
Problem 58P
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Question
Pineburst Inc. acquired an 80% interest in Smallwood Company in January 1, 2003, for an amount equal to book value. Smallwood sold land to Pineburst in 2003 at a profit of $5,000. The land is held by the buying affiliate firm until 2005, when it is sold to an unaffiliated party for a profit of $6,000. Smallwood reported net income for 2003, 2004, and 2005 of $30,000, $40,000, and $50,000, respectively. Assume that the 2003 intercompany transfer of land was upstream from Smallwood to Pinehurst.
Prepare the consolidation worksheet
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