Record the journal entries on spiniflex pigeons books

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Reference no: EM132512258

Point 1: Spiniflex Pigeon Company owns 90% of the outstanding stock of Waterhole Corporation. This interest was purchased on January 1, 1999, when Waterhole's book values were equal to its fair values. The amount paid by Spiniflex Pigeon included $10,000 for goodwill.

Point 2: On January 1, 2000, Spiniflex Pigeon purchased equipment for $100,000 which had no salvage value with a useful life of 8 years, depreciated on a straight-line basis. On January 1, 2005, Spiniflex Pigeon sold the truck to Waterhole Corporation for $40,000. The equipment was estimated to have a four-year remaining life on this date. All affiliates use the straight-line depreciation method.

Required:

Question 1 : Record the journal entries on Spiniflex Pigeon's books for 2005

Question 2 : Record the journal entries on Waterhole's books for 2005.

Reference no: EM132512258

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