Stark Company, a 90% owned subsidiary of Parker, Inc., sold land to Parker on May 1, 2020, for $80,000. The land originally cost Stark $85,000. Stark reported net income of $200,000, $180,000, and $220,000 for 2020, 2021, and 2022, respectively. Parker sold the land purchased from Stark for $92,000 in 2022. Both companies use the equity method of accounting.Which of the following will be included in a consolidation entry for 2021?
A) Debit Retained Earnings for $5,000.
B) Credit Retained Earnings for $5,000.
C) Debit Investment in Subsidiary for $5,000.
D) Credit Investment in Subsidiary for $5,000.
E) Credit Land for $5,000.
Correct Answer:
Verified
Q57: Anderson Company, a 90% owned subsidiary of
Q58: Anderson Company, a 90% owned subsidiary of
Q59: Anderson Company, a 90% owned subsidiary of
Q60: Anderson Company, a 90% owned subsidiary of
Q61: Stiller Company, an 80% owned subsidiary of
Q63: Wilson owned equipment with an estimated life
Q64: Stiller Company, an 80% owned subsidiary of
Q65: On January 1, 2020, Smeder Company, an
Q66: Wilson owned equipment with an estimated life
Q67: On January 1, 2020, Smeder Company, an
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents