Patch Corporation purchased land from Sub1 Corporation for $350,000 on December 3, 20X5. This purchase followed a series of transactions between Patch-controlled subsidiaries. On January 23, 20X5, Sub3 Corporation purchased the land from a nonaffiliate for $240,000. It sold the land to Sub2 Company for $220,000 on July 15, 20X5, and Sub2 sold the land to Sub1 for $305,000 on September 5, 20X5. Patch has control of the following companies: Subsidiary Level of Ownership20X5 Net Income Sub3 60 percent $60,000 Sub2 90 percent $140,000 Sub1 70 percent $90,000 Patch reported income from its separate operations of $345,000 for 20X5.Based on the preceding information, at what amount should the land be reported in the consolidated balance sheet as of December 31,
20X5?
A. $305,000
B. $350,000
C. $240,000
D. $220,000
Answer: C
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