Pun Corporation owns 100 percent of Sir Corporation’s common stock. On January 2, 2011, Pun sold to Sir for $40,000 machinery with a carrying amount of $30,000. Sir is depreciating the acquired machinery over a fiveyear life by the straight line method. The net adjustments to compute 2011 and 2012 consolidated income before income tax would be an increase (decrease) of:
|
2011 |
2012 |
|
|
a |
$ (8,000) |
$2,000 |
|
b |
$ (8,000) |
0 |
|
c |
$(10,000) |
$2,000 |
|
d |
$(10,000) |
0 |