Peoplemag sells a plot of land for $100,000 to seven star company, its 100 percent owned subsidiary, on january 1, 20x7. the cost of the land was $75,000, when it was purchased in 20x6. in 20x9, seven star sells the land to hot properties inc., an unrelated entity, for $120,000. how is the land reported in the consolidated financial statements for 20x7, 20x8 and 20x9? prepare simple equity-method journal entries related to an intercompany land transfer. record journal entries

PeopleMag cannot report a gain on the sale of land for 2007 or 2008 in the consolidated financial statements

Explanation:

PeopleMag cannot report a gain on the sale of land for 2007 or 2008 in the consolidated financial statements. The land must be reported on the consolidated balance sheet at its original cost of $75,000. The intercompany gain is unrealized and is eliminated. In 2009, the entire gain of $45,000 ($120,000 - $75,000) is realized and recognized when the land is sold to an outside party.

answer loneliness;