Use the Following Information to Answer the Question(s) Below

question 32

Multiple Choice

Use the following information to answer the question(s) below.

In 2014, Parla Corporation sold land to its subsidiary, Sidd Corporation, for $38,000. It had a book value of $24,000. In the next year, Sidd sold the land for $41,000 to an unaffiliated firm.

-The 2014 unrealized gain from the intercompany sale

• A)should be recognized in consolidation in 2014 by a working paper entry.
• B)should be eliminated from consolidated net income by a working paper entry that credits land for $14,000.
• C)should be eliminated from consolidated net income by a working paper entry that debits land for $14,000.
• D)should be eliminated from consolidated net income by a working paper entry that credits gain on sale of land for $14,000.

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Definitions:

Pleasant Words

Words that evoke positive feelings and associations, often used to create a friendly or agreeable impact.

Signal-Detection Theory

A theory that explores how decisions are made under conditions of uncertainty, distinguishing between sensory signals and noise.

False Alarms

Incorrect or mistaken alerts, typically referring to a warning signal that goes off inappropriately, suggesting an event or danger that is non-existent.

Misses

In a cognitive or perceptual task, failures to detect or respond to stimuli present.