Stark Company, a 90% Owned Subsidiary of Parker, Inc

question 37

Multiple Choice

Stark Company, a 90% owned subsidiary of Parker, Inc. sold land to Parker on May 1, 2012, for $80,000. The land originally cost Stark $85,000. Stark reported net income of $200,000, $180,000, and $220,000 for 2012, 2013, and 2014, respectively. Parker sold the land purchased from Stark in 2012 for $92,000 in 2014.
Compute the gain or loss relating to the land that will be reported in consolidated net income for 2014.

• A) $5,000 loss.
• B) $7,000 gain.
• C) $12,000 gain.
• D) $7,000 loss.
• E) $12,000 loss.

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The abilities associated with expressing ideas effectively through spoken words.

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