Milton Co Owned All of the Voting Common Stock of Walker

question 74

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, 2020?

• A) $96,000.
• B) $120,000.
• C) $140,000.
• D) $144,000.
• E) $165,000.

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Definitions:

High-exchange Relationships

Collaborative partnerships or interactions characterized by mutual benefits, trust, and frequent exchanges of resources or information.

Obligations

Duties or commitments that one is bound to carry out or fulfill.

Constraints

Limitations or restrictions that impact or regulate actions, processes, or developments.

Incompatible Biases

Prejudices or preconceived opinions that conflict with each other or with current situations.