A parent sells land to its subsidiary for $40,000 and reports a gain of $5,000. At what amount should the land be shown on the consolidated balance sheet?

Name: A parent sells land to its subsidiary for $40,000 and reports a gain of $5,000. At what amount should the land be shown on the consolidated balance sheet?
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Quizplus · Accepted Answer

In a consolidated balance sheet, intercompany transactions are eliminated. The land should be shown at the parent's original cost, which is $40,000 - $5,000 gain = $35,000.

A Parent Sells Land to Its Subsidiary for $40,000 and Reports