Emron Company owns a 100% interest in the common stock of the Dietz Company.On January 1, 2017, Emron sold Dietz a fixed asset that Dietz will use over a 5-year period.The asset was sold at a $5,000 profit.In the consolidated statements, this profit will
A)not be recorded.
B)be recognized over 5 years.
C)be recognized in the year of sale.
D)be recognized when the asset is resold to outside parties at the end of its period of use.

Question

Emron Company owns a 100% interest in the common stock of the Dietz Company.On January 1, 2017, Emron sold Dietz a fixed asset that Dietz will use over a 5-year period.The asset was sold at a $5,000 profit.In the consolidated statements, this profit will
A)​not be recorded.
B)​be recognized over 5 years.
C)​be recognized in the year of sale.
D)​be recognized when the asset is resold to outside parties at the end of its period of use.

Quizplus · Accepted Answer

The Answer is B

Emron Company Owns a 100% Interest in the Common Stock