Company P owns 100% of the common stock of Company S. Company P is constructing an asset for Company S that will be used in Company S's manufacturing operations over a 5-year period. The asset was 50% complete at the end of 20X1 and was completed on December 31, 20X2. Company P is recording the construction under the percentage of completion method. The asset was put into use by Company S on January 1, 20X3. The profit on the asset was estimated to be $50,000. Actual results complied to the estimate. On the consolidated statements, the profit recognized will be:
20X1 20X2 20X3 20X4 - 20X7
a. 0 50,000 0 0
b. 25,000 25,000 0 0
c. 0 0 10,000 10,000/year
d. 0 0 50,000 0