Question

Consolidation Entry TL removes the gain on sale from an intra-entity land sale because the land remains under the control of the consolidated entity.a. True b. False

Answer 1

Answer:

True

Explanation:

In consolidation the intra-entity transaction takes place and the gain on these transactions are eliminated as the sale and purchases are taken place in the same entity as a group. At the time of consolidation of group account the gain arising from these types of transactions are eliminated because the asset is held by the same entity as a group but in the individual account of each company of the group the gain on these transactions are recorded and reported in the accounts.