Wilson Owned Equipment with an Estimated Life of 10 Years

question 75

Multiple Choice

Wilson owned equipment with an estimated life of 10 years when it was acquired for an original cost of $80,000. The equipment had a book value of $50,000 at January 1, 2012. On January 1, 2012, Wilson realized that the useful life of the equipment was longer than originally anticipated, at ten remaining years.
On April 1, 2012 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:
Compute the amortization of gain through a depreciation adjustment for 2014 for consolidation purposes.

• A) $1,925.
• B) $1,825.
• C) $2,000.
• D) $1,500.
• E) $7,000.

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Definitions:

Group Cohesiveness

The degree to which members of a group are attracted to each other and motivated to stay in the group, affecting the group's performance and stability.

Liking Relationships

Interpersonal connections characterized by positive feelings toward each other and enjoyment of each other's company.

Group Polarisation

Describes the tendency of a group to make decisions that are more extreme than the initial inclination of its members, often leading to riskier or more conservative positions.

Prejudice

Preconceived opinion or bias against an individual or group without adequate knowledge, reason, or experience, often based on stereotypes.