Stroud Corporation Is an 80%-Owned Subsidiary of Pennie, Inc

question 26

Multiple Choice

Stroud Corporation is an 80%-owned subsidiary of Pennie, Inc., acquired by Pennie several years ago. On January 1, 20X2, Pennie sold land with a book value of $60,000 to Stroud for $90,000. Stroud resold the land to an unrelated party for $100,000 on September 26, 20X3. The gain from sale of land that will appear in the consolidated income statements for 20X2 and 20X3, respectively, is ____.

• A)$0 and $10,000
• B)$0 and $40,000
• C)$30,000 and $10,000
• D)$30,000 and $40,000

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Definitions:

Molecules

The smallest unit of a chemical compound that can exist; composed of two or more atoms held together by chemical bonds.

Hydrogen Bond

A fragile connection between two molecules caused by the electrostatic pull between a proton in one molecule and an atom with a strong electron attraction in the other.

Compound

A chemical entity that results from the combination of atoms from two or more different elements in a specific proportion and structure.

Molecules

Groups of two or more atoms held together by chemical bonds, constituting the smallest identifiable unit of a compound.