In January 2014, S Company, an 80% Owned Subsidiary of P

Multiple Choice

In January 2014, S Company, an 80% owned subsidiary of P Company, sold equipment to P Company for $990,000. S Company's original cost for this equipment was $1,000,000 and had accumulated depreciation of $100,000. P Company continued to depreciate the equipment over its 9 year remaining life using the straight-line method. This equipment was sold to a third party on January 1, 2017 for $720,000. What amount of gain should P Company record on its books in 2017?

A) $30,000.
B) $60,000.
C) $120,000.
D) $180,000.