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EXERCISE 7‐4 Entries—Intercompany Sale of Land LO 6 Procter Company owns 90% of the outstanding stock...

EXERCISE 7‐4 Entries—Intercompany Sale of Land LO 6 Procter Company owns 90% of the outstanding stock of Silex Company. On January 1, 2019, Silex Company sold land to Procter Company for $350,000. Silex had originally purchased the land on June 30, 2010, for $200,000. Procter Company plans to construct a building on the land bought from Silex in which it will house new production machinery. The estimated useful life of the building and the new machinery is 15 years. Required: Prepare the entries on the books of Procter related to the intercompany sale of land for the years ended December 31, 2019, and December 31, 2020. Prepare in general journal form the workpaper entries necessary because of the intercompany sale of land in: The consolidated financial statements workpaper for the year ended December 31, 2019. The consolidated financial statements workpaper for the year ended December 31, 2020.

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