A Parent Sold Land to Its Partially Owned Subsidiary During

question 4

Multiple Choice

A parent sold land to its partially owned subsidiary during the year at a loss.The subsidiary continues to hold the land at the end of the year.The amount to be reported as consolidated net income for the year should equal:

• A)the parent's separate operating income,plus the intercompany loss.
• B)the parent's separate operating income,plus the intercompany loss,plus the subsidiary's net income.
• C)the parent's separate operating income,minus the intercompany loss.
• D)the parent's separate operating income,minus the intercompany loss,plus the subsidiary's net income.

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Definitions:

Opportunity Cost

The cost of forfeiting the next best alternative when making a decision, representing the benefits missed when choosing one option over another.

Alfalfa

A perennial flowering plant often used as forage for livestock, valued for its high nutrient content and adaptability to diverse climates.

Trade Benefit

The advantages a country gains from engaging in international trade, such as access to a wider variety of goods and services, economies of scale, and increased market competition.

Produce Alfalfa

The process of cultivating and harvesting alfalfa, a perennial flowering plant used primarily as fodder for livestock.