Company P holds 70 percent of the voting shares of Company S. During 20X8, Company S sold land with a book value of $125,000 to Company P for $150,000. Company P continues to hold the land at the end of the year. The companies file separate tax returns and are subject to a 40 percent tax rate. Assume that Company P uses the fully adjusted equity method in accounting for its investment in Company S.Based on the information given, which consolidating entry relating to the intercorporate sale of land is to be entered in the consolidation worksheet prepared at the end of 20X8? A)Deferred Tax Asset10,000 Income Tax Expense 10,000 B)Deferred Tax Asset25,000 Income Tax Expense 25,000 C)Deferred Tax Asset25,000 Land 25,000 D)No consolidating entry is required.
A. Option A
B. Option B
C. Option C
D. Option D
Answer: A
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Calhoun, Inc purchased equipment at the beginning of 2015 for $180,000 . Rose decided to depreciate the equipment over a 5-year period using the double-declining-balance method. Calhoun estimated the equipment's residual value at $30,000 . Which of the following statements is correct concerning Rose's financial statements at December 31, 2015?
a. The book value of the equipment is $108,000. b. The book value of the equipment is $72,000. c. The total accumulated depreciation is $90,000. d. Depreciation expense for 2015 is $60,000.
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The interest rate that investors demand to earn for loaning their money is known as the ________
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