Frazer Corporation purchased 80 percent of Minnow Corporation's voting common stock on January 1 20X1....
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Frazer Corporation purchased 80 percent of Minnow Corporation's voting common stock on January 1 20X1. On December 31, 20x5, Frazer received 5210,000 from Minnow for a truck Frazer had purchased on January 1, 20X2, for S300,000. The truck is expected to have a 10-year useful life and no salvage value. Both companies depreciate trucks on a straight-line basis. Required a. Prepare the worksheet consolidation entry or entries needed at Deoember 31, 20X5, to remove the effects of the intercompany sale. (If no entry is required for a transactionlevent, select "No journal entry required" in the first account field.) Answer is complete and correct. No Event Accounts Debit 90,000 30,000 Credit Truck Gain on sale Accumulated depreciation 20,000 b. Prepare the worksheet consolidation entry or entries needed at Deoember 31, 20X8, to remove the effects of the intercompany sale. (If no entry is required for a transactionlevent, select "No journal entry required" in the first account field.) 3 Answer is complete but not entirely correct. No Event Debit 30,000 90,000 Credit Investment in Minnow Corporation Truck 20,000 20,000 20,000
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