Compute the gain or loss reported on Stark's books prior to consolidation from the intra-entity transfer of land in 2017.
A) $80,000 gain.
B) $80,000 loss.
C) $ 5,000 gain.
D) $ 5,000 loss.
E) $85,000 loss.

Question

Quizplus · Accepted Answer

The intra-entity transfer of land results in a gain or loss being reported on the seller's books. In this case, Stark reported a gain of $5,000 on the transfer of land to Park. Therefore, the answer is (D) $5,000 loss (since the gain is subtracted from book value).

Compute the Gain or Loss Reported on Stark's Books Prior