Parent Sold Land to Its Subsidiary for a Gain in 2007.The

Multiple Choice

Parent sold land to its subsidiary for a gain in 2007.The subsidiary sold the land externally for a gain in 2010.Which of the following statements is true?

A) A gain will be reported on the consolidated income statement in 2007.
B) A gain will be reported on the consolidated income statement in 2010.
C) No gain will be reported on the 2010 consolidated income statement.
D) Only the parent company will report a gain in 2010.
E) The subsidiary will report a gain in 2007.