contestada

In January 2014, S Company, an 80% owned subsidiary of P Company, sold equipment to P Company for $990,000. S Company's original cost for this equipment was $1,000,000 and had accumulated depreciation of $100,000. P Company continued to depreciate the equipment over its 9 year remaining life using the straight-line method. This equipment was sold to a third party on January 1, 2017 for $720,000. What amount of gain should P Company record on its books in 2017?
a. $30,000.
B. $60,000.
c. $120,000.
d. $180,000.

Respuesta :

Karabo99

Answer:

The amount of gain should P Company record on its books in 2017 is $60,000.

Explanation:

The amount of gain = Sale value  - Written down value

                                 = $720,000  - $660,000  

                                 = $60,000

Therefore ,The amount of gain should P Company record on its books in 2017 is $60,000.

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