Parent owned 80% of Sub. In Year 1, Parent sold a trademark with a book value...
Parent owned 80% of Sub. In Year 1, Parent sold a trademark with a book value of $400,000 to Sub. The selling price was $700,000. The trademark has an indefinite useful life. At what amount should the trademark be reported in the Year 1 ending consolidated balance sheet? a. $560,000 i thiink it is a
QUESTION 19 Using the same facts as in the previous question. Sub sells the trademark in Year 3 for $1,000,000 in cash. In Year 3, the gain on sale in consolidated net income should be: a. $300,000 b. $600,000 c. $440,000 d. $680.000
please answer only question 19
Homework Answers
Answer :
(19) Gain on sale to third party is recognised
Gain on sale = selling price - original cost to parent
= $1,000,000 - $400,000 = $600,000
Thus correct answer is option (b) $600,000
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