Farm Owns 70% of the Common Shares of XL and Accounts

question 25

Essay

Farm owns 70% of the common shares of XL and accounts for its investment using the cost method. In 20X6, Farm purchased equipment from XL for $300,000. The equipment had been purchased by XL for $420,000 in 20X2, had accumulated depreciation of $168,000 and a six-year remaining life at December 31, 20X5. Both companies record a full year of depreciation expense in the year of the purchase and no depreciation in the year of a sale.
Required:
Indicate the consolidation adjustments to the following accounts for the years ended 20X6, 20X8, and 20X11:
• Depreciation expense
• Net book value of equipment
• Non-controlling interest on statement of comprehensive income
• Non-controlling interest on statement of financial position
• Retained earnings, end of year

---

Definitions:

Connection Line

A graphical representation used in diagrams or flowcharts to indicate a relationship or path between two elements.

Delete Queries

Commands or operations in a database that remove records from one or more tables according to specified criteria.

Standard Modules

In programming, modules containing reusable code that can be invoked throughout the software application.

Form

An interactive document with fields for entering information, often used for data entry and submission in software applications.