Question
In 2011, Parla Corporation sold land to its subsidiary, Sidd Corporation, for $38,000. It had a book value of $24,000. In the next year (2012),
In 2011, Parla Corporation sold land to its subsidiary, Sidd Corporation, for $38,000. It had a book value of $24,000. In the next year (2012), Sidd sold the land for $41,000 to an unaffiliated firm.
The 2011 unrealized gain from the intercompany sale:
| a. | should be eliminated from consolidated net income by a working paper entry that debits land for $14,000.
| |
| b. | should be recognized in consolidation in 2011 by a working paper entry. | |
| c. | should be eliminated from consolidated net income by a working paper entry that credits gain on sale of land for $14,000.
| |
| d. | should be eliminated from consolidated net income by a working paper entry that credits land for $14,000.
is the answer A? |
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
