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Huckster Corporation purchased land on January 1, 20X1, for $24,000. On June 10, 20X4, it sold...

Huckster Corporation purchased land on January 1, 20X1, for $24,000. On June 10, 20X4, it sold the land to its subsidiary, Lowly Corporation, for $32,500. Huckster owns 60 percent of Lowly’s voting shares.

  

Required:
a.

Prepare the worksheet elimination entries needed to remove the effects of the intercompany sale of land in preparing the consolidated financial statements for 20X4 and 20X5.

1. Record the eliminating entry, December 31, 20X4.

2. Record the eliminating entry, December 31, 20X5.
b.

Prepare the worksheet elimination entries needed on December 31, 20X4 and 20X5, if Lowly had initially purchased the land for $24,000 and then sold it to Huckster on June 10, 20X4, for $32,500.

1. Record the eliminating entry, December 31, 20X4.

2. Record the eliminating entry, December 31, 20X5.
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