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, 2017, 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, 2018.The gain from sale of land that will appear in the consolidated income statements for 2017 and 2018, respectively, is ____.

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

---

Definitions:

Economics

The social science that studies how individuals, governments, firms, and nations make choices on allocating resources to satisfy their wants and needs.

Income

The amount of money or its equivalent received during a period of time in exchange for labor or services, from the sale of goods or property, or as a profit from financial investments.

Education

The process of receiving or giving systematic instruction, especially at a school or university.

Confidence

The degree to which one can be certain or believe in a finding, result, or proposition, often used in the context of statistical conclusions.