Company P Owns 100% of the Common Stock of Company $\quad$

question 40

Multiple Choice

Company P owns 100% of the common stock of Company S.Company P is constructing an asset for Company S that will be used in Company S's manufacturing operations over a 5-year period.The asset was 50% complete at the end of 2016 and was completed on December 31, 2017.Company P is recording the construction under the percentage of completion method.The asset was put into use by Company S on January 1, 2018.The profit on the asset was estimated to be $50,000.Actual results complied with the estimate.On the consolidated statements, the profit recognized will be ?
?
$\quad$ 2016 $\quad$$\quad$ 2017 $\quad$ 2018 $\quad$ 2019 - 2017

• A)? \(\quad \)0 \(\quad \)\(\quad \)50,000 \(\quad \)0\(\quad \)\(\quad \)\(\quad \) \(\quad \)0
• B)?\(\quad \)25,000 \(\quad \)25,000 \(\quad \)0 \(\quad \)\(\quad \)\(\quad \)0
• C)\(\quad \)0 \(\quad \)\(\quad \)\(\quad \)0 \(\quad \)\(\quad \)10,000 \(\quad \)10,000/year?
• D)\(\quad \)0 \(\quad \)\(\quad \)\(\quad \)0 \(\quad \)\(\quad \)50,000 \(\quad \)\(\quad \)0

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Definitions:

Ghrelin

A hormone produced mainly by the stomach that stimulates appetite and promotes food intake.

Pancreas

An organ in the abdomen involved in the digestion process and the regulation of blood sugar levels by producing enzymes and hormones like insulin.

Insulin

A substance secreted by the pancreas that controls levels of blood sugar by aiding the absorption of glucose by the body's tissues.

Blood Glucose Level

The concentration of glucose present in the blood, which is a critical indicator of metabolic health and is regulated by insulin and glucagon.