On January 1, 20X1 Bullock, Inc. sells land to its 80%-owned subsidiary, Humphrey Corporation, at a $20,000 gain. The land is sold by Humphrey to an outside party in 20X3. What is the effect of the intercompany sale of land on 20X1 consolidated net income?
A) Consolidated net income will be the same as it would have been had the sale not occurred.
B) Consolidated net income will be $20,000 less than it would have been had the sale not occurred.
C) Consolidated net income will be $16,000 less than it would have been had the sale not occurred.
D) Consolidated net income will be $20,000 greater than it would have been had the sale not occurred.
Correct Answer:
Verified
Q5: The sale of inventory items by a
Q7: This year, Rose Company acquired all of
Q9: Perry, Inc. owns a 90% interest in
Q10: Williard Corporation regularly sells inventory items to
Q11: On January 1, 20X1, Poe Corp. sold
Q13: Cattle Company sold inventory with a cost
Q16: Porch Company owns a 90% interest in
Q17: This year, Rose Company acquired all of
Q18: Sally Corporation, an 80%-owned subsidiary of Reynolds
Q19: Which of the following intercompany transactions would
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents