Wilson Owned Equipment with an Estimated Life of 10 Years

question 28

Multiple Choice

Wilson owned equipment with an estimated life of 10 years when the equipment was acquired for an original cost of $80,000. The equipment had a book value of $50,000 at January 1, 2020. On January 1, 2020, Wilson realized that the useful life of the equipment was longer than originally anticipated, at ten remaining years.On April 1, 2020 Simon Company, a 90% owned subsidiary of Wilson Company, bought the equipment from Wilson for $68,250 and for depreciation purposes used the estimated remaining life as of that date. The following data are available pertaining to Simon's income and dividends declared: Assuming there are no excess amortizations associated with the consolidation, and no other intra-entity asset transfers, compute Wilson's share of income from Simon for consolidation for 2022.

• A) $118,825.
• B) $115,000.
• C) $117,000.
• D) $119,000.
• E) $118,800.

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Definitions:

Confidence Interval

A set of numbers from sample-derived statistics, believed to hold the value of an unnoticed population parameter.

Z-values

Statistical measures that represent the number of standard deviations an element is from the mean.

Confidence Interval

A range of values, derived from a sample, that is expected, with a particular probability, to contain the actual value of an unknown population parameter.

Sample Size

The total number of observations or data points collected in a statistical study.