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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Definitions:

Wheel Of Retailing

A theory suggesting that retail business goes through a cycle starting from entering the market as a low price, low margin operation, to becoming more upscale with higher prices and services.

Retail Outlets

Physical stores or shops where goods are sold directly to the consumer.

Market Entry

The strategy or process of introducing new products or services into a market, considering factors like competition and regulatory environment.

Sales Per Square Foot

A retail metric that measures the amount of revenue a business generates for every square foot of sales space, indicating efficiency and productivity.