Effect of the intercompany sale of land

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Reference no: EM13131987

On April 1, 2003, Penny Corporation sells land to its 60%-owned subsidiary, Sahl Corporation, at a $15,000 gain. The land is still held by Sahl on December 31, 2003.

What is the effect of the intercompany sale of land on consolidated net income?

A) Consolidated net income will be the same as it would have been had the sale not occurred.

B) Consolidated net income will be $15,000 less than it would have been had the sale not occurred.

C) Consolidated net income will be $9,000 less than it would have been had the sale not occurred.

D) Consolidated net income will be $15,000 greater than it would have been had the sale not occurred.

Reference no: EM13131987

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