Question: Fanshawe Inc. owns 80% of Oxford Inc. and uses the cost method to account for its investment. The Y6 income statements of both companies are shown below. Fanshawe Oxford Gross profit $100,000 $50,000 Miscellaneous revenues (losses) (30,000) (20,000) Depreciation expense (20,000) (15,000) Income tax expense (20,000 (6,000) Net Income $30,000 $9,000 On January 1, Y6, Oxford acquired equipment for $7,000 and sold it the same day to Fanshawe for $12,000. The equipment had a remaining useful life of 10 years on that date. Both companies are subject to an effective tax rate of 40%. Which of the following is the correct amount of depreciation expense appearing on Fanshawe's Y6 consolidated income statement? Question options: $34,700 $36,520 $34,500 $35,000