Dalton Corp

question 55

Multiple Choice

Dalton Corp.owned 70% of the outstanding common stock of Shrugs Inc.On January 1, 2016, Dalton acquired a building with a ten-year life for $420,000.No salvage value was anticipated and the building was to be depreciated on the straight-line basis.On January 1, 2018, Dalton sold this building to Shrugs for $392,000.At that time, the building had a remaining life of eight years but still no expected salvage value.For consolidation purposes, what is the Excess Depreciation (ED entry) for this building for 2018?

• A) Accumulated Depreciation 7,000 Depreciation expense 7,000
• B) Accumulated Depreciation 4,900 Depreciation Expense 4,900
• C) Depreciation Expense 7,000 Accumulated Depreciation 7,000
• D) Depreciation Expense 4,900 Accumulated Depreciation 4,900
• E) Accumulated Depreciation 42,000 Depreciation Expense 42,000

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