On November 8, 2018, Power Corp. sold land to Wood Co., its wholly owned subsidiary. The land cost $61,500 and was sold to Wood for $89,000

 On November 8, 2018, Power Corp. sold land to Wood Co., its wholly owned subsidiary. The land cost $61,500 and was sold to Wood for $89,000.  For consolidated financial statement reporting purposes, when must the gain on the sale of the land be recognized?

A) Proportionately over a designated period of years.

B) When Wood Co. sells the land to a third party.

C) No gain may be recognized.

D) As Wood uses the land.

E) When Wood Co. begins using the land productively.

Answer: B