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Fred Corporation owns 75 percent of Winner Company's votingshares, acquired on March 21, 20X5, at book value. At that date,the fair value of the noncontrolling interest was equal to 25percent of the book value of Winner Company. On January 1, 20X4,Fred paid $150,000 for equipment with a 10-year expected totaleconomic life. The equipment was depreciated on a straight-linebasis with no residual value. Winner purchased the equipment fromFred on December 31, 20X6, for $140,000. Winner sold land it hadpurchased for $75,000 on February 18, 20X4, to Fred for $60,000 onOctober 10, 20X7. Required: Prepare the elimination entries for20X8 related to the sale of depreciable assets and land.Correct Answer:DRAccumulated Depreciation 5,000CRDepreciation Expense 5,000DRInvestment in Summit 30,000DRBuildings and Equipment 10,000CRAccumulated Depreciation 40,000For building,If we are looking at 2008, why investment 30, bldg 10 and A/d40? Did we not record an entry in 2007? Should it not be Investment25K, Equipment 10K, and A/D 35K? It is posted as the correctsolution, but can someone explain why?