Partridge Purchased a 60% Interest in Sparrow on January 1

Multiple Choice

Partridge purchased a 60% interest in Sparrow on January 1, 20X1, for $240,000. At the time of the purchase, Sparrow had the following stockholders' equity: Any excess is attributable to equipment with a 10-year life. On January 1, 20X6, the retained earnings of Sparrow was $175,000. The entire investment was sold for $300,000 on January 1, 20X6. The gain was ____.

A) $87,000
B) $90,000
C) $27,000
D) $78,000