Use the following information in answering questions 1 and 2: Pop Company sells land with a book value of $5,000 to Son Company for $6,000 in 2016. Son is a wholly owned subsidiary of Pop. Son Company holds the land during 2017. Son Company sells the land for $8,000 to an outside entity in 2018. In 2016 the unrealized gain: To be eliminated is affected by the noncontrolling interest percentage Is initially included in Son’s accounts and must be eliminated from Pop Company’s income from Son Company under the equity method Is eliminated from consolidated net income by a workpaper entry that includes a credit to the land account for $1,000 Is eliminated from consolidated net income by a workpaper entry that includes a credit to the land account for $6,000
E 6-1 General Questions
Use the following information in answering questions 1 and 2:
Pop Company sells land with a book value of $5,000 to Son Company for $6,000 in 2016. Son is a wholly owned subsidiary of Pop. Son Company holds the land during 2017. Son Company sells the land for $8,000 to an outside entity in 2018.
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In 2016 the unrealized gain:
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To be eliminated is affected by the noncontrolling interest percentage
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Is initially included in Son’s accounts and must be eliminated from Pop Company’s income from Son Company under the equity method
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Is eliminated from consolidated net income by a workpaper entry that includes a credit to the land account for $1,000
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Is eliminated from consolidated net income by a workpaper entry that includes a credit to the land account for $6,000
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