In January 2008, S Company, an 80% Owned Subsidiary of P

question 14

Multiple Choice

In January 2008, S Company, an 80% owned subsidiary of P Company, sold equipment to P Company for $1,980,000.S Company's original cost for this equipment was $2,000,000 and had accumulated depreciation of $200,000.P Company continued to depreciate the equipment over its 9 year remaining life using the straight-line method.This equipment was sold to a third party on January 1, 2014 for $1,440,000.What amount of gain should P Company record on its books in 2014?

• A)$60,000.
• B)$120,000.
• C)$240,000.
• D)$360,000.

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