Large owned 80% of Small. In Year 1, Large sold land with a book value of $500,000 to Small. The selling price was $900,000. At what amount should the land be reported in the Year 1 ending consolidated balance sheet?

Using the same facts as in the previous question. Small sells the land in Year 5 for $1,500,000 in cash. In Year 3, the gain on sale in consolidated net income should be:

$480,000

$600,000

$800,000

$1,000.000