What is the total gain on sale realized

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Problem 1: Farm owns 70% of the common shares of XL and accounts for its investment using the cost method. In 20X6, Farm purchased equipment from XL for $300,000. The equipment had been purchased by XL for $420,000 in 20X2, had accumulated depreciation of $168,000 and a five-year remaining life at December 31, 20X5. Both companies record a full year of depreciation expense in the year of the purchase and no depreciation in the year of a sale. What is the total gain on sale realized in 20x7

Option 1: $8,000

Option 2: $9,600

Option 3: $48.000

Option 4: Nil

Reference no: EM132968908

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