In preparing its consolidated financial statements at December31, 20X7, the following consolidation entries were included in theconsolidation worksheet of Master Corporation:
| Consolidation WorksheetEntries | Debit | Credit |
| Buildings | 245,000 |
| Gain on Sale of Building | 49,000 | |
| AccumulatedDepreciation | | 294,000 |
| | |
| | |
| | | |
| Consolidation Worksheet Entries | Debit | Credit |
| Accumulated Depreciation | 3,500 | |
| Depreciation Expense | | 3,500 |
Master owns 60 percent of Rakel Corporation’s voting commonstock. On January 1, 20X7, Rakel sold Master a building it hadpurchased for $1,030,000 on January 1, 20X1, and depreciated on a20-year straight-line basis. Master recorded depreciation for 20X7using straight-line depreciation and the same useful life andresidual value as Rakel.
Required:
a. What amount did Master pay Rakel for the building?
b.
What amount of accumulated depreciation did Rakel report atJanuary 1, 20X7, prior to the sale?
c.
What annual depreciation expense did Rakel record prior to thesale?
d.
What expected residual value did Rakel use in computing itsannual depreciation expense?
e.
What amount of depreciation expense did Master record in20X7?
f.
If Rakel reported net income of $75,000 for 20X7, what amount ofincome will be assigned to the noncontrolling interest in theconsolidated income statement for 20X7?
g.
If Rakel reported net income of $56,000 for 20X8, what amount ofincome will be assigned to the noncontrolling interest in theconsolidated income statement for 20X8?
