At the beginning of 2018, a parent sells a building with a book value of $1,000,000 to
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Question:
At the beginning of 2018, a parent sells a building with a book value of $1,000,000 to its subsidiary for $1,500,000. The building has a 10-year remaining life at the time of sale. Straight-line depreciation is used, with no residual value.
At the beginning of 2021, the subsidiary sells the building to an outside company for $800,000. On the 2021 consolidation working paper, the unconfirmed intercompany gain on the building sale is recognized in the amount of:
A. | $500,000 | |
B. | $400,000 | |
C. | $100,000 | |
D. | $350,000 |
Related Book For
Intermediate Accounting
ISBN: 978-0078025839
9th edition
Authors: J. David Spiceland, James Sepe , Mark Nelson , Wayne Thomas
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