Company A owns 90 percent of the common stock of Company B. At the beginning of 2021, Company B sold a piece of land that had a book value of $40,000 to Company A for $50,000. At the beginning of 2023, Company A sold the land to outsiders for $62.000. How much total gains on the sale of land should be recognized in the 2023 consolidated financial statements?
Company A owns 90 percent of the common stock of Company B. At the beginning of 2021, Company B sold a piece of land that had a book value of $40,000 to Company A for $50,000. At the beginning of 2023, Company A sold the land to outsiders for $62.000. How much total gains on the sale of land should be recognized in the 2023 consolidated financial statements?
Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations
Section: Chapter Questions
Problem 34P
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Transcribed Image Text:Company A owns 90 percent of the common stock of Company
B. At the beginning of 2021, Company B sold a piece of land
that had a book value of $40,000 to Company A for $50,000. At
the beginning of 2023, Company A sold the land to outsiders for
$62.000. How much total gains on the sale of land should be
recognized in the 2023 consolidated financial statements?
10,800
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