Stiller Company, an 80% Owned Subsidiary of Leo Company, Purchased

question 79

Multiple Choice

Stiller Company, an 80% owned subsidiary of Leo Company, purchased land from Leo on March 1, 2010, for $75,000. The land originally cost Leo $60,000. Stiller reported net income of $125,000 and $140,000 for 2010 and 2011, respectively. Leo uses the equity method to account for its investment.
-Compute the gain or loss on the intra-entity sale of land.

• A) $15,000 loss.
• B) $15,000 gain.
• C) $50,000 loss.
• D) $50,000 gain.
• E) $65,000 gain.

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Definitions:

Cold Sensation

The perception of reduced temperature, often triggered by low environmental temperatures or specific nerve responses.

Wetness Sensation

The perception of moisture or liquid, which can involve complex interactions between touch, temperature, and pressure sensory systems.

Hot Sensation

The subjective experience or feeling of heat, often as a response to temperature stimuli.

Itching Sensation

An uncomfortable sensation on the skin that provokes the desire to scratch the affected area.