Justings Co

question 16

Multiple Choice

Justings Co. owned 80% of Evana Corp. During 2013, 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.

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Definitions:

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