Justings Co

question 34

Multiple Choice

Justings Co.owned 80% of Evana Corp.During 2009,Justings sold to Evana land with a book value of $48,000.The selling price was $70,000.In its accounting records,Justings should

• A)not recognize a gain on the sale of the land since it was made to a related party.
• B)recognize a gain of $17,600.
• C)defer recognition of the gain until Evana sells the land to a third party.
• D)recognize a gain of $8,000.
• E)recognize a gain of $22,000.