Please explain how to do this.

Plesco Corporation acquired 80 percent of Slesco Corporation's voting common stock on January 1, 20X7. On January 1, 20X8, Plesco received $350,000 from Slesco for equipment Plesco had purchased on January 1, 20X5, for $400,000. The equipment is expected to have a 10-year useful life and no salvage value. Both companies depreciate equipment on a straight-line basis.

Based on the preceding information, the gain on sale of equipment recorded by Plesco for 20X8 is:

$40,000.

$50,000.

$70,000.

$65,000.