Plesco Corporation acquired 80 percent of Slesco Corporation's voting common stock on January 1, 20X7. On January 1, 20X8, Plesco received $350,000 from Slesco for equipment Plesco had purchased on January 1, 20X5, for $400,000. The equipment is expected to have a 10-year useful life and no salvage value. Both companies depreciate equipment on a straight-line basis.Based on the preceding information, the gain on sale of equipment recorded by Plesco for 20X8 is:
A. $40,000.
B. $65,000.
C. $50,000.
D. $70,000.
Answer: D
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