N3.Preparing the [I] consolidation entries for sale of landAssume that during 2015 a wholly owned subsidiary sells land that originally cost $540,000 to its parent for a sale price of $600,000. The parent holds the land until it sells the land to an unaffiliated company on December 31, 2019. The parent uses the equity method of pre-consolidation bookkeeping. a. Prepare the required [I] consolidation entry in 2015.DescriptionCredit[lgain][lgain]◆[lgain]b. Prepare the required [I] consolidation entry required at the end of each year 2016 through 2018.DescriptionDebitCreditLandDebit◆◆00◆♦c. Assume that the parent re-sells the land outside of the consolidated group for $630,000 on December 31, 2019. Prepare thejournal entry made by the parent to record the sale and the required [l] consolidation entry for 2019.DescriptionDebitCredit0000000000000000d. What will be the amount of gain reported in the consolidated income statement in 2019?$0

Full Consolidation - This method is used for accounting when parents get full control over the…

N3. Preparing the [I] consolidation entries for sale of land Assume that during 2015 a wholly owned subsidiary sells land that originally cost $540,000 to its parent for a sale price of $600,000. The parent holds the land until it sells the land to an unaffiliated company on December 31, 2019. The parent uses the equity method of pre-consolidation bookkeeping.

N3. Preparing the [I] consolidation entries for sale of land Assume that during 2015 a wholly owned subsidiary sells land that originally cost $540,000 to its parent for a sale price of $600,000. The parent holds the land until it sells the land to an unaffiliated company on December 31, 2019. The parent uses the equity method of pre-consolidation bookkeeping.

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

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 8RE

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3-During 2020, Parent sells land to Subsidiary for $226,800. The land had a book value of $159,000. The land is then sold to an unaffiliated party for $303,000 in 2024. Required:a. Prepare the consolidation entry related to the land sale for 2020.b. Prepare the consolidation entry related to the land sale for 2021.c. Prepare the consolidation entry related to the land for 2024.d. What will be the gain on sale on the 2024 consolidated income statement?
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