Parent Sold Land to Its Subsidiary for a Gain in 2008

question 76

Multiple Choice

Parent sold land to its subsidiary for a gain in 2008. The subsidiary sold the land externally for a gain in 2011. Which of the following statements is true?

• A) A gain will be reported in the consolidated income statement in 2008.
• B) A gain will be reported in the consolidated income statement in 2011.
• C) No gain will be reported in the 2011 consolidated income statement.
• D) Only the parent company will report a gain in 2011.
• E) The subsidiary will report a gain in 2008.

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Definitions:

Ambiguous

Open to more than one interpretation; not having one obvious meaning or clear definition.

More Than One Meaning

Refers to terms, words, or phrases that have multiple interpretations or significances.

Positional Negotiation

A negotiation strategy where one party takes a fixed position, arguing for it and making concessions only as necessary to close the deal.

Interest-Based Negotiation

A negotiation strategy focused on the underlying interests, needs, or desires of the parties involved, rather than on predetermined positions or demands.