4. Palapa Corporation purchased a truck for $30,000 from its 90 percent-owned subsidiary, Gon Corporation, on January

Question:

4. Palapa Corporation purchased a truck for $30,000 from its 90 percent-owned subsidiary, Gon Corporation, on January 1, 2015, when the truck had a five-year remaining useful life and cost $20,000. What is the amount by which the Investment to Gon account will be affected by the unrealized gains from this transaction at December 31, 2016?

a $10,000 b $8,000 c $7,200 d None of the above

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