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1. Parent Company owns 90% of the stock of Subsidiary company.
2. On 1/1/02, Subsidiary company purchased equipment at a cost of $24,000. Subsidiary company depreciates this asset over a 12 year life using straight-line depreciation and no salvage value.
3. 1/1/04 Subsidiary company sold the equipment to parent company for $25,500. Parent company depreciates this equipment over its remaining 10 year life using straight-line depreciation with no expected salvage value.
REQUIRED: Prepare the appropriate eliminating entries for this transaction which would appear on the year-end December 31, 2005 worksheet.
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