Illustration 6-1 INTERCOMPANY PROFI TS ON LAND P owns a 90 %interest in S acquired a fair value at the beginning of 20X1. During 20X1 land that cost $1,500 is soldirtercompany for $2,500. The land is sd dto an out si de entityin 20 X3 for $3,000 Separate Incones 20X: P Sells Land to S Downstream P S Sales $50,000 $30,000 Expenses and CGS $40,000) (25,000) S Sells Land to P Upstream P S $50,000 $30,000 (40,000) (25,000) Gain on sale of land Separate incones 1,000 $11.000 $ 5.000 $10,000 1.000 $ 6.000 Separate Incones 20X2: Sales $55,000 Expenses and CGS (44, 000) Separate incones $11.000 $35,000 (29.000) $55,000 (44,000) $35.000 (29.000 $6.000 $11.000 $6.000 Separate Incones 20X3: Sales $60,000 Expenses & Co (50,000) $38,000 (30,000) $60,000 (50,000) $38,000 (30,000) Gain on sale of land Separate incones 500 8.500 500 SIO 500 $10.000$ $ 8.000 Illustration 6-1 INTERCOMPANY PROFI TS ON LAND P owns a 90 %interest in S acquired a fair value at the beginning of 20X1. During 20X1 land that cost $1,500 is soldirtercompany for $2,500. The land is sd dto an out si de entityin 20 X3 for $3,000 Separate Incones 20X: P Sells Land to S Downstream P S Sales $50,000 $30,000 Expenses and CGS $40,000) (25,000) S Sells Land to P Upstream P S $50,000 $30,000 (40,000) (25,000) Gain on sale of land Separate incones 1,000 $11.000 $ 5.000 $10,000 1.000 $ 6.000 Separate Incones 20X2: Sales $55,000 Expenses and CGS (44, 000) Separate incones $11.000 $35,000 (29.000) $55,000 (44,000) $35.000 (29.000 $6.000 $11.000 $6.000 Separate Incones 20X3: Sales $60,000 Expenses & Co (50,000) $38,000 (30,000) $60,000 (50,000) $38,000 (30,000) Gain on sale of land Separate incones 500 8.500 500 SIO 500 $10.000$ $ 8.000