Milton Co Owned All of the Voting Common Stock of Walker

question 101

Multiple Choice

Milton Co. owned all of the voting common stock of Walker Co. On January 3, 2020, Milton sold equipment to Walker for $140,000. The equipment cost Clemente $165,000. At the time of the transfer, the balance in accumulated depreciation was $45,000. The equipment had a remaining useful life of five years and a $0 salvage value. Both entities use the straight-line method of depreciation.At what amount should the equipment (net of depreciation) be included in the consolidated balance sheet dated December 31, 2021?

• A) $48,000.
• B) $72,000.
• C) $96,000.
• D) $145,000.
• E) $165,000.

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Definitions:

Scarcity

The fundamental economic problem of having seemingly unlimited human wants in a world with limited resources, leading to the necessity of choice.

Economic Problem

The fundamental issue of having limited resources to meet unlimited wants and needs, requiring choices and priorities in allocation.

Available Resources

The total assets, both natural and man-made, that can be utilized to produce goods and services.

Production Possibilities Curve

A graph that shows the maximum number of possible units a company can produce if it only produces two types of goods.