Peace Corporation owns 100% of Sade Corporation common stock. On January 2, 20X6, Peace sold machinery with a carrying amount of $30,000 to Sade for $50,000. Sade is depreciating the acquired machinery over a 5-year life using the straight-line method.
20X6 20X7The related net adjustments to compute the 20X6 and 20X7 consolidated income before income tax would be an increase (decrease) of:
a. $(16,000) $4,000
b. $(16,000) $0
c. $(20,000) $4,000
d. $(20,000) $0