Parent Sells Plant to Subsidiary for $500 000 on January $\begin{array}{llcc} \text { Dr Profit on sale } &\$ 100000 \\ \text {Cr Plant } &&\$ 100000 \\\end{array}$

question 1

True/False

Parent sells plant to Subsidiary for $500 000 on January 1 20X9.The original cost to Parent was $400 000 on 1 January 20X7.The plant is depreciated straight line over ten years with no scrap value.
The correct consolidation elimination entry for the plant, at 1 January 20X9, is:
$\begin{array}{llcc} \text { Dr Profit on sale } &\$ 100000 \\ \text {Cr Plant } &&\$ 100000 \\\end{array}$

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Definitions:

Fiduciary Duty

Fiduciary duty is a legal obligation of one party to act in the best interest of another when entrusted with certain responsibilities, primarily in financial matters.

Secretly Competes

When an individual or entity engages in competition against another party without their knowledge, often violating a trust or agreement.

Business Transaction

The process of buying, selling, or exchanging goods, services, or any kind of financial relation between businesses or between a business and a consumer.

Breached Fiduciary Duty

A violation of the obligation to act in the best interest of another party, often related to situations of trust and confidence.