A Parent Entity Group Sold a Depreciable Non-Current Asset to a Subsidiary

question 20

Multiple Choice

A parent entity group sold a depreciable non-current asset to a subsidiary entity for $2800.The asset originally cost $3000 and at the date of sale accumulated depreciation was $500.The amount of the unrealised gain on sale to be eliminated is:

• A)$2800
• B)$500
• C)$300
• D)$200.

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Definitions:

Rate Variances

The difference between the expected (standard) cost and the actual cost incurred for a rate-based expense, such as labor or materials.

Lubricants

Substances applied to surfaces to reduce friction, protect against wear, or provide lubrication, often essential in machinery and manufacturing processes.

Supplies

Items that are used in the day-to-day operations of a business, not directly part of the manufactured product but necessary for its production.

Labor Rate Variance

The difference between the actual labor costs incurred and the standard labor costs expected for the work performed.