Andrea Co. acquired 70% of Calabrese Co. on January 1, 2016. At the date of acquisition, the excess acquisition price was allocated partly to undervalued building of $108,000 (6-year remaining life) and undervalued capitalized software of $860,000 (20-year remaining life). The remaining excess was allocated to goodwill of $130,000.

Various Intra-Entity Transactions Were Recorded by the Related Companies:

On February 13, 2018, Andrea Co. sold land to Calabrese Co. for $1,200,000 cash. The land had been acquired by Andrea Co. in 1987 for $380,000. On March 1, 2020, Calabrese Co. sold the land to unaffiliated buyers for $1,320,000.

On January 1, 2019, Andrea sold equipment to Calabrese Co. for $140,000. The equipment had been acquired by Andrea in 2015 at a cost of $120,000 and had a remaining book value of $100,000 at the date of transfer. The equipment had a remaining useful life of 10 years.

In 2018 through 2020, Andrea transferred finished goods to Calabrese Co. Note: Round all gross profit rates to the nearest 100th.

Period Cost Transfer Price Unsold Goods at Year-end*

2018 $ 50,000 $ 70,000 $ 12,000

2019 $ 60,000 $ 100,000 $ 30,000

2020 $ 90,000 $ 120,000 $ 50,000

The ending inventories are at transfer price*

29. Using data in Exhibit 7 above, given the inter-entity transactions, what would be the consolidated balance of Land at the end of 2020?

A. $3,666,000.

B. $2,346,000.

C. $2,342,000.

D. $1,980,000.

30. Assuming the land is the only property disposition in the consolidated group for 2020, how much gain should be reported on the consolidated balance sheet at the end of the year?

A. $0.

B. $120,000.

C. $820,000.

D. $940,000.

Exhibit 7: Worksheet for Balance Sheet (partial) (2020) Balance Sheet (selected) Parent Subsidiary Debit Credit NCI Consolidated Land 1,460,000 886,000 Remember: The subsidiary sold the land in 2020 to unrelated buyers