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Pitcher Corporation purchased 60 percent of Softball Corporation’s voting common stock on January 1, 20X1. On...

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Accounting

Pitcher Corporation purchased 60 percent of SoftballCorporation’s voting common stock on January 1, 20X1. On January 1,20X5, Pitcher received $288,000 from Softball for a truck Pitcherhad purchased on January 1, 20X2, for $368,000. The truck isexpected to have a 10-year useful life and no salvage value. Bothcompanies depreciate trucks on a straight-line basis.

Required:
a. Prepare the worksheet consolidation entry or entries needed atDecember 31, 20X5, to remove the effects of the intercompany sale.(If no entry is required for a transaction/event, select"No journal entry required" in the first accountfield.)

  • Record the entry to eliminate the gain on the truck and tocorrect the asset's basis.
  • Record the entry to adjust Accumulated Depreciation.



b. Prepare the worksheet consolidation entry or entries needed atDecember 31, 20X6, to remove the effects of the intercompany sale.(If no entry is required for a transaction/event, select"No journal entry required" in the first accountfield.)

  • Record the entry to eliminate the gain on the truck and tocorrect the asset's basis.
  • Record the entry to adjust Accumulated Depreciation.

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