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What adjustment should be made to the gain

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Question - LeBlanc Ltd. acquired some office furniture at the end of 20X1 and sold it to its parent company, Teak Co., for $360,000, a $60,000 profit. The furniture will be depreciated over 12 years, using the straight-line method. At the beginning of 20X5, Teak sold the furniture to a third party for $310,000. In preparing Teak's 20X5 consolidated financial statements, what adjustment, if any, should be made to the $40,000 gain on the sale of equipment?

Reference no: EM133168639

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