Problem regarding unaffiliated firm

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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. Which of the following is correct?

A-No consolidation working paper entry was necessary in 2004.

B-A consolidation working paper entry was required only if the subsidiary was less than 100% owned in 2004.

C-A consolidation working paper entry is required each year until the land is sold outside the related parties.

D-A consolidated working paper entry was required only if the land was held for resale in 2004.

Reference no: EM13132099

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