Highland Inc. holds 70% of the common shares of Sissy Inc. On January 1, 20X5, Sissy sold equipment to Highland for $17,500. Sissy purchased this equipment from an independent non-associate for $25,000 on January 1, 20X1 and it has a net book value of $15,000 on January 1, 20X5. The equipment has a useful life of 10 years.

What is the total realized gain on equipment in 20X6, the year subsequent to the sale to Highland? 

Answer rating: 100% (QA)

1 Calculation of Gain on Sale to Highland Inc in 20X5 Sissy Inc sold equipment to Highland Inc for 1... View the full answer