QUESTION 2 S Ltd acquired land from its parent company P Ltd for $1 000 000. The land had originally cost P Ltd $100 000 (assume a tax rate of 30%). Two years later S sold the land outside the group for $1 200 000, the consolidation journal entry required would be (ignoring tax effects): a. Dr. Opening Retained Earnings $200 000 Cr. Gain on Sale $200 000 b. no entry required c. Dr. Opening Retained Earnings $1 100 000 Cr. Gain on Sale $1 100 000 d. Dr. Opening Retained Earnings $900 000 Cr. Gain on Sale $900,000

S Ltd acquired land from its parent company P Ltd for $1000000. The land had originally cost P Ltd $100000 (assume a tax rate of 30% ). Two years later $ sold the land outside the group for $1200 000 , the consolidation journal entry required would be (ignoring tax effects): a. Dr. Opening Retained Earnings Cr. Gain on Sale b. no entry required c. Dr. Opening Retained Earnings Cr. Gain on Sale d. Dr. Opening Retained Earnings Cr. Gain on Sale $200000 $200000 $1100000 $1100000 $900000 $900,000