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Louise Corp. owned all of the voting common stock of Thelma Co. On January 1, 2017,...

Louise Corp. owned all of the voting common stock of Thelma Co. On January 1, 2017, Thelma sold a parcel of land to Louise. The land had a book value of $32,000 and was sold to Louise for $45,000. What journal entry, if any, should be recorded on the consolidation work sheet for the consolidation the operations of Louise Corp and Thelma Corp as a result of this transaction? SHOW ALL WORK IN SUPPORT OF YOUR ANSWER

Chaffee Co. owned all of the voting common stock of Shane Corp. The corporations' balance sheets dated December 31, 2016, include the following balances for land: for Chaffee--$436,000, and for Shannon--$248,000. On March 18, 2017, Chaffee sold to Shane a parcel of land with a book value of $60,000. The selling price was $75,000. There were no other transactions which affected the companies' land accounts during 2017. What is the consolidated balance for land on the 12/31/2017 balance sheet? YOU MUST SHOW ALL WORK IN SUPPORT OF YOUR ANSWER TO GET CREDIT!

A.

$323,000.

B.

$376,000.

C.

$436,000.

D.

$684,000.

E.

$699,000.

Walston Corp. owned 90% of the outstanding common stock of Sherman Inc. On January 1, 2015, Walston acquired a building with a ten-year life for $500,000. No salvage value was anticipated and the building was to be depreciated on the straight-line basis. On January 1, 2017, Walston sold this building to Sherman for $448,000. At that time, the building had a remaining life of eight years but still no expected salvage value. In preparing financial statements for 12/31/2017, how does this transfer affect the calculation of Walston's share of consolidated net income? YOU MUST SHOW ALL WORK IN SUPPORT OF YOUR ANSWER IN ORDER TO GET CREDIT!

A.

Consolidated net income must be reduced by $37,800.

B.

Consolidated net income must be reduced by $42,000.

C.

Consolidated net income must be reduced by $43,200.

D.

Consolidated net income must be reduced by $48,000.

E.

Consolidated net income must be reduced by $54,000.
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