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which one is correct? Jones Corporation owns 100% of Smith Corporation. On July 1, Year 1, Jones Corporation sold land to Smith Corporation for $400,000.

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which one is correct?

Jones Corporation owns 100% of Smith Corporation. On July 1, Year 1, Jones Corporation sold land to Smith Corporation for $400,000. The initial cost of the land to Smith was $330,000. On December 31, Year 1, Smith sold the land to IBM Corporation for $425,000. Jones does not own any portion of IBM Corporation. How should Jones account for the gain on sale of land for the two land sales transactions in its consolidated working papers and general ledger? Recognize the $70,000 intercompany gain on sale of land on July 1, Year 1 to Jones. Recognize a gain on sale of $25,000 for the sale of land to IBM on December 31, Year 1. Record no entry for the intercompany land sale on July 1, Year 1 to Jones. Recognize a gain on sale of $ 95,000 for the sale of land to IBM on December 31, Year 1. Eliminate the $70,000 intercompany gain on sale of land on July 1, Year 1 to Jones. Eliminate the $25,000 gain on the sale of land to IBM on December 31, Year 1. Eliminate the $70,000 intercompany gain on sale of land on July 1, Year 1 to Jones. Recognize a gain on sale of $95,000 for the sale of land to IBM on December 31, Year 1

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