Pepper Company acquired 90 percent of Salt Company's stock at underlying book value on January 1,...

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Pepper Company acquired 90 percent of Salt Company's stock atunderlying book value on January 1, 20X8. At that date, the fairvalue of the non-controlling interest was equal to 10 percent ofthe book value of Salt Company. Salt Co. sold equipment to PepperCo. for a $360,000 on December 31, 20X8. Salt Co. had originallypurchased the equipment for $400,000 on January 1, 20x5, with auseful life of 10 years and no salvage value. At the time of thepurchase, Pepper Co. estimated that the equipment still had thesame remaining useful life. Both companies use straight-linedepreciation. Pepper sold land costing $90,000 to Salt Company onJune 28, 20X9, for $122,000.
a)Prepare Pepper’s journal entries related to inter-company saleat December 31, 20X9.
b)Prepare the consolidation entries that related tointer-company sale of land at December 31, 20X9.
c) Prepare the consolidation entries that related tointer-company sale of equipment at December 31, 20X9.

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Pepper Company acquired 90 percent of Salt Company's stock atunderlying book value on January 1, 20X8. At that date, the fairvalue of the non-controlling interest was equal to 10 percent ofthe book value of Salt Company. Salt Co. sold equipment to PepperCo. for a $360,000 on December 31, 20X8. Salt Co. had originallypurchased the equipment for $400,000 on January 1, 20x5, with auseful life of 10 years and no salvage value. At the time of thepurchase, Pepper Co. estimated that the equipment still had thesame remaining useful life. Both companies use straight-linedepreciation. Pepper sold land costing $90,000 to Salt Company onJune 28, 20X9, for $122,000.a)Prepare Pepper’s journal entries related to inter-company saleat December 31, 20X9.b)Prepare the consolidation entries that related tointer-company sale of land at December 31, 20X9.c) Prepare the consolidation entries that related tointer-company sale of equipment at December 31, 20X9.