Acc407 Advanced Accounting: E7-9 Frazer Corporation purchased 60 percent of Minnow Corporation

Acc407 Advanced Accounting

E7-9 Transfer of Depreciable Asset at Beginning of Year
Frazer Corporation purchased 60 percent of Minnow Corporation’s voting common stock on January 1. 20X1. On January 1, 20X5, Frazer received $245,000 from Minnow for a truck Frazer had purchased on January 1, 20X2, for $300,000. 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. Give the worksheet eliminating entry or entries needed at December 31, 20X5, to remove the effects of the intercompany sale.
b. Give the worksheet eliminating entry or entries needed at December 31, 20X6, to remove the effects of the intercompany sale.
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