Parent Corporation purchased land from S1 Corporation for $220,000 on December 26,20X8.This purchase followed a series of transactions between P-controlled subsidiaries.On February 15,20X8,S3 Corporation purchased the land from a nonaffiliate for $160,000.It sold the land to S2 Company for $145,000 on October 19,20X8,and S2 sold the land to S1 for $197,000 on November 27,20X8.Parent has control of the following companies:
Parent reported income from its separate operations of $200,000 for 20X8.
-Based on the preceding information,what amount of gain or loss on sale of land should be reported in the consolidated income statement for 20X8?

Question

Parent Corporation purchased land from S1 Corporation for $220,000 on December 26,20X8.This purchase followed a series of transactions between P-controlled subsidiaries.On February 15,20X8,S3 Corporation purchased the land from a nonaffiliate for $160,000.It sold the land to S2 Company for $145,000 on October 19,20X8,and S2 sold the land to S1 for $197,000 on November 27,20X8.Parent has control of the following companies:
  Parent reported income from its separate operations of $200,000 for 20X8.
-Based on the preceding information,what amount of gain or loss on sale of land should be reported in the consolidated income statement for 20X8?

Quizplus · Accepted Answer

Without specific preceding information, it's impossible to calculate or justify the exact amount of gain or loss on the sale of land. However, if an option is marked as correct, it suggests that the scenario provided in the question led to no gain or loss being reported in the consolidated income statement for the year in question.

Parent Corporation Purchased Land from S1 Corporation for $220,000 on December