Use the following information to answer questions 10 & 11.

In 20X1, Parent Corporation sold land to its subsidiary, Sub Corporation, for $38,000. It had a book value of $24,000. In the next year, Sub sold the land for $41,000 to an unaffiliated firm.

10/ Which of the following is correct?

Select one:

a.No consolidation working paper entry is required for this transaction in 20X1

b.A consolidation working paper entry is required only if the subsidiary was less than 100% owned in 20X1

c.A consolidation working paper entry is required each year that Sub has the land

d.A consolidated working paper entry was required only if the land was held for resale in 20X1

11/ The 20X1 unrealized gain from the intercompany sale:

Select one:

a.should be recognized in consolidation in 20X1 by a working paper entry

b.should be eliminated from consolidated net income by a working paper entry that credits land for $14,000

c.should be eliminated from consolidated net income by a working paper entry that debits land for $14,000

d.should be eliminated from consolidated net income by a working paper entry that credits gain on sale of land for $14,000