Pam Corporation holds 70 percent ownership of NorthernEnterprises. On December 31, 20X6, Northern paid Pam $28,000 for atruck that Pam had purchased for $33,000 on January 1, 20X2. Thetruck was considered to have a 20-year life from January 1, 20X2,and no residual value. Both companies depreciate equipment usingthe straight-line method.
Required:
a.
Prepare the worksheet consolidation entry or entries needed onDecember 31, 20X6, to remove the effects of the intercompany sale.(If no entry is required for a transaction/event, select "Nojournal entry required" in the first account field.)
*Record the entry to eliminate the gain on the truck and tocorrect the asset's basis.
b.
Prepare the worksheet consolidation entry or entries needed onDecember 31, 20X7, to remove the effects of the intercompany sale.(If no entry is required for a transaction/event, select "Nojournal entry required" in the first account field.)
*Record the entry to eliminate the gain on the truck and tocorrect the asset's basis.
*Record entry to adjust Accumulated Depreciation.
