REFERENCE: Ref.05_09 Stiller Company,an 80% Owned Subsidiary of Leo Company,purchased Land from Land

Multiple Choice

REFERENCE: Ref.05_09
Stiller Company,an 80% owned subsidiary of Leo Company,purchased land from Leo on March 1,2009,for $75,000.The land originally cost Leo $60,000.Stiller reported net income of $125,000 and $140,000 for 2009 and 2010,respectively.Leo uses the equity method to account for its investment.
-Compute the gain or loss on the intercompany sale of land.

A) $15,000 loss.
B) $15,000 gain.
C) $50,000 loss.
D) $50,000 gain.
E) $65,000 gain.