Multiple Choice
On January 1, 2016 Bullock, Inc.sells land to its 80%-owned subsidiary, Humphrey Corporation, at a $20,000 gain.The land is sold by Humphrey to an outside party in 2018.What is the effect of the intercompany sale of land on 2016 consolidated net income?
A) Consolidated net income will be the same as it would have been had the sale not occurred.
B) Consolidated net income will be $20,000 less than it would have been had the sale not occurred.
C) Consolidated net income will be $16,000 less than it would have been had the sale not occurred.
D) Consolidated net income will be $20,000 greater than it would have been had the sale not occurred.
Correct Answer:
Verified
Correct Answer:
Verified
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