Parent sold land to its subsidiary resulting in a gain in 2019, the year of transfer. The subsidiary sold the land to an unrelated third party for a gain in 2022. Which of the following statements is true?
A) A gain will be recognized in the consolidated income statement in 2019.
B) A gain will be recognized in the consolidated income statement in 2022.
C) No gain will be recognized in the 2022 consolidated income statement.
D) Only the parent company will recognize a gain in 2022.
E) The subsidiary will recognize a gain in 2019.
Correct Answer:
Verified
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