Chain Co. owned all of the voting common stock of Shannon Corp. The corporations' balance sheets dated December 31, 2012, include the following balances for land: for Chain--$416,000, and for Shannon-$256,000. On the original date of acquisition, the book value of Shannon's land was equal to its fair value. On April 4, 2013, Chain sold to Shannon a parcel of land with a book value of $65,000. The selling price was $83,000. There were no other transactions which affected the companies' land accounts during 2012. What is the consolidated balance for land on the 2013 balance sheet?
A) $672,000.
B) $690,000.
C) $755,000.
D) $737,000.
E) $654,000.

Question

Quizplus · Accepted Answer

Parent's Land $416,000 + Sub's Land $256,000 = $672,000 - Any gain on the transfer is deferred until the parcel is sold outside the entity in the future.

Chain Co Owned All of the Voting Common Stock of Shannon