Parent sold land to its subsidiary resulting in a gain in 2016, the year of transfer. The subsidiary sold the land to an unrelated third party for a gain in 2019. Which of the following statements is true?

Multiple Choice

• A gain will be recognized in the consolidated income statement in 2016.
• A gain will be recognized in the consolidated income statement in 2019.
• No gain will be recognized in the 2019 consolidated income statement.
• Only the parent company will recognize a gain in 2019.
• The subsidiary will recognize a gain in 2016.