On January 1, 2016 Bullock, Inc

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 2018 consolidated net income?​

A) ​Consolidated net income will be the same as it would have been had the intercompany sale not occurred.
B) Consolidated net income will be $20,000 less than it would have been had the intercompany sale not occurred.​
C) ​Consolidated net income will be $16,000 less than it would have been had the intercompany sale not occurred.
D) ​Consolidated net income will be $20,000 greater than it would have been had the intercompany sale not occurred.