7. P owns 80 percent of S1, and S1 owns 70 percent of S2. Separate incomes of...

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7. P owns 80 percent of S1, and S1 owns 70 percent of S2. Separate incomes of P, S1, and S2 are $20,000,

$10,000, and $5,000, respectively, for 2016. During 2016, S1 sold land to P at a gain of $1,000. Compute S1’s income on an equity basis. Discuss why you did or did not adjust S1’s investment in S2’s account for the unrealized gain.

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Advanced Accounting

ISBN: 9781292214597

13th Global Edition

Authors: Joseph H. Anthony, Bruce Bettinghaus, Floyd A. Beams, Kenneth Smith

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