REFERENCE: Ref.05_09 Stiller Company,an 80% Owned Subsidiary of Leo Company,purchased Land from Land

question 61

Multiple Choice

REFERENCE: Ref.05_09
Stiller Company,an 80% owned subsidiary of Leo Company,purchased land from Leo on March 1,2009,for $75,000.The land originally cost Leo $60,000.Stiller reported net income of $125,000 and $140,000 for 2009 and 2010,respectively.Leo uses the equity method to account for its investment.
-On a consolidation worksheet,what adjustment would be made for 2009 regarding the land transfer?

• A)Debit gain for $50,000.
• B)Credit gain for $50,000.
• C)Debit land for $15,000.
• D)Credit land for $15,000.
• E)Credit gain for $15,000.

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Definitions:

Specific Gravity

A measure of the density of a substance compared to the density of water.

Dehydration

A condition resulting from the excessive loss of body water.

Urinary Diversion

A surgical procedure to redirect urine flow from its normal pathway due to disease or injury, often involving the creation of a stoma on the abdominal wall.

Ileal Conduit

A surgical procedure to create a new path for urine to exit the body after the bladder has been removed, using a segment of the ileum (part of the small intestine).