P Company Purchased Land from Its 80% Owned Subsidiary at a Cost

question 21

Multiple Choice

P Company purchased land from its 80% owned subsidiary at a cost of $100,000 greater than it subsidiary's book value. Two years later P sold the land to an outside entity for $50,000 more than P's cost. In its current year consolidated income statement P and its subsidiary should report a gain on the sale of land of:

• A) $50,000.
• B) $120,000.
• C) $130,000.
• D) $150,000.

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