P Company Purchased Land from Its 80% Owned Subsidiary at a Cost

question 42

Multiple Choice

P Company purchased land from its 80% owned subsidiary at a cost of $100,000 greater than it subsidiary's book value.Two years later P sold the land to an outside entity for $50,000 more than it's cost.In its current year consolidated income statement P and its subsidiary should report a gain on the sale of land of:

• A)$50,000.
• B)$120,000.
• C)$130,000.
• D)$150,000.

Understand the challenges faced by small businesses, including financing, taxation, and government regulations.

Appreciate the diversity of ownership and the varied challenges they face in today’s market.

Recognize the importance of business plans in outlining a firm’s mission, goals, and strategies.

Understand the mechanisms through which small businesses contribute to economic innovation and growth.

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Definitions:

Payments

Transactions where a good or service is exchanged for monetary compensation.

Present Value

The current value of a future sum of money or stream of cash flows, discounted at a specific interest rate.

Future Cash Flows

The anticipated receivable or payable cash amounts of a company, used for investment analysis and financial planning.

Investor

An individual or institution that allocates capital with the expectation of receiving financial returns.