REFERENCE: Ref.05_10 Stark Company,a 90% Owned Subsidiary of Parker,Inc. ,Sold Land to Land

question 47

Multiple Choice

REFERENCE: Ref.05_10
Stark Company,a 90% owned subsidiary of Parker,Inc. ,sold land to Parker on May 1,2009,for $80,000.the land originally cost Stark $85,000.Stark reported net income of $200,000,$180,000,and $220,000 for 2009,2010,and 2011,respectively.Parker sold the land it purchased from Stark in 2009 for $92,000 in 2011.
-Compute the gain or loss on the intercompany sale of land.

• A)$80,000 gain.
• B)$80,000 loss.
• C)$5,000 gain.
• D)$5,000 loss.
• E)$85,000 loss.

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