P Corp.owns 90% of the outstanding common stock of S Company.On December 31, 2014, S sold equipment to P for an amount greater than the equipment's book value but less than its original cost.The equipment should be reported on the December 31, 2014 consolidated balance sheet at

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Since P owns 90% of S, it has control over S's operations and financial statements. Therefore, the sale of equipment between P and S is considered an intercompany transaction. According to Generally Accepted Accounting Principles (GAAP), intercompany transactions must be eliminated in consolidation to avoid overstating the assets and revenues of the consolidated entity. Therefore, the equipment should be reported on the consolidated balance sheet at P's original cost less S's recorded gain to eliminate the impact of the intercompany transaction.

P CorpOwns 90% of the Outstanding Common Stock of S Company