On June 30, 2018, Parent Company sold some land to its subsidiary for $240,000. The land had cost Parent Company $120,000 when it was acquired three years previously. On June 30, 2020, the subsidiary sold the land to an outside party for $275,000. Parent Company owns 75% of the outstanding shares of its subsidiary and accounts for its investment using the cost method. On December 31, 2018, the land account balance in the books of Parent Company is $300,000 and in the books of the subsidiary is $300,000. No acquisition differential was allocated to land. What will be the amount of land in the consolidated balance sheet at December 31, 2018? $510,000 $360,000 $480,000 $600,000
On June 30, 2018, Parent Company sold some land to its subsidiary for $240,000. The land had cost Parent Company $120,000 when it was acquired three years previously. On June 30, 2020, the subsidiary sold the land to an outside party for $275,000. Parent Company owns 75% of the outstanding shares of its subsidiary and accounts for its investment using the cost method. On December 31, 2018, the land account balance in the books of Parent Company is $300,000 and in the books of the subsidiary is $300,000. No acquisition differential was allocated to land. What will be the amount of land in the consolidated balance sheet at December 31, 2018? $510,000 $360,000 $480,000 $600,000
Chapter6: Corporations: Redemptions And Liquidations
Section: Chapter Questions
Problem 60P
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Transcribed Image Text:On June 30, 2018, Parent Company sold some land to its subsidiary for $240,000. The land had cost Parent
Company $120,000 when it was acquired three years previously. On June 30, 2020, the subsidiary sold the
land to an outside party for $275,000. Parent Company owns 75% of the outstanding shares of its
subsidiary and accounts for its investment using the cost method.
On December 31, 2018, the land account balance
the books of Parent Company is $300,000 and in the
books of the subsidiary is $300,000. No acquisition differential was allocated to land. What will be the
amount of land in the consolidated balance sheet at December 31, 2018?
$510,000
$360,000
$480,000
$600,000
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