REFERENCE: Ref.05_07 On April 1,2009 Wilson Company,a 90% Owned Subsidiary of Simon

question 37

Multiple Choice

REFERENCE: Ref.05_07
On April 1,2009 Wilson Company,a 90% owned subsidiary of Simon Company,bought equipment from Simon for $68,250.On January 1,2009,Simon realized that the useful life of the equipment was longer than originally anticipated,at ten remaining years.The equipment had an original cost to Simon of $80,000 and a book value of $50,000 with a 10-year remaining life as of January 1,2009.
The following data are available pertaining to Wilson's income and dividends:

-Compute the amortization of gain for 2011 for consolidation purposes.

• A)$1,925.
• B)$1,825.
• C)$2,000.
• D)$1,500.
• E)$7,000.