Assignment Option #1: Intercompany Transactions – Equipment Using the data in the Option 1 Spreadsheet (linked at the bottom of the page), perform the accounting required for the elimination of each independent intercompany transaction: 1. Prepare the b

     Assignment Option #1: Intercompany Transactions –   Equipment                                                                  Using the   data in the Option 1 Spreadsheet   (linked at the bottom of the page), perform the accounting required for the   elimination of each independent intercompany transaction:                                                       1.   Prepare the book calculations                                 2.   Perform the required journal entries                                                                     Requirements:                                                                       Complete   all work on the spreadsheet attached to this assignment; it will be your only   deliverable.                                                               Clearly   identify the requirements being addressed. Show all calculations within the   cells of an Excel spreadsheet. This means that you must use formulas and   links so that the thought process can be examined. Make good use of comments   to convey your thought process as well. No hard coding of solutions. Submit a   single MS Excel file for grading.    

          Assume   that Parent Company decides to sell Equipment (Cost = $10,000, Accumlated   Depreciation = $1,000) to Sub for $20,000 cash. Show the sale and the   subsequent elimination entries by Parent Company   Parent Company Balance Sheet   Sale by Parent   Assets, Liabilities &   Equities Book Value  Account  DR CR   Cash $1,500,000          AR $10,000          Inventory $200,000          Land $640,000          Equipment $400,000          Accumulated Depreciation -$150,000               Acquisition by Sub   Patent $0  Account  DR CR    Total Assets $2,600,000          AP $100,000          Common Stock $450,000          Additional Paid In Capital $600,000          Retained Earnings $1,450,000  Elimination Entries by Parent     Total Liabilities & Equity $2,600,000  Account  DR CR              Sub Company Balance Sheet          Assets, Liabilities &   Equities Book Value          Cash $35,000          AR $10,000          Inventory $65,000          Land $40,000          PP&E $400,000          Accumulated Depreciation -$150,000          Patent $0           Total Assets $400,000          AP $100,000          Common Stock $100,000          Additional Paid In Capital $50,000          Retained Earnings $150,000        Total Liabilities & Equity $400,000                 Assume that book Value = Fair Value