In 2014, P Company Sells Land to Its 80% Owned

question 4

Multiple Choice

In 2014, P Company sells land to its 80% owned subsidiary, S Company, at a gain of $50,000.What is the effect of this sale of land on consolidated net income assuming S Company still owns the land at the end of the year?

• A)consolidated net income will be the same as if the sale had not occurred.
• B)consolidated net income will be $50,000 less than it would had the sale not occurred.
• C)consolidated net income will be $40,000 less than it would had the sale not occurred.
• D)consolidated net income will be $50,000 greater than it would had the sale not occurred.

---

Definitions:

The Grapevine

Informal communication network within an organization, allowing information to be passed through personal contacts and conversations.

Horizontal Communication

Describes communication that occurs between peers or colleagues within the same level of an organization, facilitating collaboration and information sharing.

Leadership Style

The approach or method adopted by a leader in guiding, directing, and influencing the behavior and work of others.

Constructive Criticism

Feedback that is offered in a positive manner with the intent to improve or correct, rather than to belittle.