Multiple Choice
On January 1,20X7,Server Company purchased a machine with an expected economic life of five years.On January 1,20X9,Server sold the machine to Patron Corporation and recorded the following entry:
Patron Corporation holds 75 percent of Server's voting shares.Server reported net income of $50,000,and Patron reported income from its own operations of $100,000 for 20X9.There is no change in the estimated economic life of the equipment as a result of the intercorporate transfer.
-Based on the preceding information,in the preparation of the 20X9 consolidated income statement,depreciation expense will be:
A) Debited for $1,000 in the consolidating entries.
B) Credited for $1,000 in the consolidating entries.
C) Debited for $15,000 in the consolidating entries.
D) Credited for $15,000 in the consolidating entries.
Correct Answer:
Verified
Correct Answer:
Verified
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