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:

Rubber Supply

The availability or provision of rubber, a significant material used in various industries, which can be natural or synthetic and is vital for manufacturing numerous products.

Radio and Movies

Forms of mass media that rose to prominence in the 20th century, with radio dominating early on for broadcasting music and news, and movies providing visual storytelling and entertainment.

Consumer Goods

Products and services that are purchased by individuals for personal use, ranging from household items to leisure and entertainment.