Stiller reported net income of 125000 and 140000 for 2010, Ask an Expert

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Stiller Company, an 80% owned subsidiary of Leo company, purchased land from leo on March 1, 2010, for $75,000. The land originally cost Leo $60,000. Stiller reported net income of $125,000 and $140,000 for 2010 and 2011, respectively. Leo uses the equity method to account for its investment. On a consolidation worksheet, what adjustment would be made for 2010 regarding the land transfer?

A. Credit gain for $50,000

B. Debit gain for $50,000

C. Debit land for $15,000

D. Credit land for $15,000

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M969798

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