Problem related to unrealized gain

Reference no: EM13132075

In 2004, Parrot Company sold land to its subsidiary, Tree Corporation, for $12,000. It had a book value of $10,000. In the next year, Tree sold the land for $18,000 to an unaffiliated firm. The 2004 unrealized gain

A-was deferred until 2006.

B-was eliminated from consolidated net income by a working paper entry that credited land $2,000.

C-made consolidated net income $2,000 less than it would have been had the sale not occurred.

D-made consolidated net income $2,000 greater than it would have been had the sale not occurred.

Reference no: EM13132075

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