Homework answers / question archive / P Ltd acquired 80% of S Ltd in 20x6

P Ltd acquired 80% of S Ltd in 20x6

Accounting

Share With

P Ltd acquired 80% of S Ltd in 20x6. In February 20x7, P Ltd sold a piece of land, which was carried in its books at $100 million, to S Ltd for $120 million. S Ltd sold the land to an outside party for $150 million in March 20x8. The consolidation adjusting entries required in relation to the land for 20x7 and 20x8 consolidation should be:
-20x7:Dr Profit on sale of land $20 million; Cr Land $20 million20x8:Dr Profit on sale of land $50 million; Cr Land $50 million
-20x7:Dr Profit on sale of land $20 million; Cr Land $20 million20x8:Dr Profit on sale of land $20 million; Cr Land $20 million
-None of the listed choices.
-20x7:Dr Profit on sale of land $20 million; Cr Land $20 million20x8:Dr Beginning retained profit $20 million; Cr Profit on sale of land $20 million
-20x7:Dr Profit on sale of land $20 million; Cr Land $20 million20x8:Dr Beginning retained profit $50 million; Cr Profit on sale of land $50 million
Which option is it?