Dunn Corporation owns 100 percent of Grey Corporation’s common stock. On January 2, 2017, Dunn sold to Grey $40,000 of machinery with a carrying amount of $30,000. Grey is depreciating the acquired machinery over a five-year remaining life by the straight-line method. The net adjustments to compute 2017 and 2018 consolidated net income would be an increase (decrease) of 2017 2018$(8,000) $2,000$(8,000) –0–$(10,000) $2,000$(10,000) –0– (AICPA adapted)

given that, the Dunn Corporation sold the machinery having written down a value of $30000 for…

Answered: Dunn Corporation owns 100 percent of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Dunn Corporation owns 100 percent of Grey Corporation’s common stock. On January 2, 2017, Dunn sold to Grey $40,000 of machinery with a carrying amount of $30,000. Grey is depreciating the acquired machinery over a five-year remaining life by the straight-line method. The net adjustments to compute 2017 and 2018 consolidated net income would be an increase (decrease) of

2017 2018

$(8,000) $2,000

$(8,000) –0–

$(10,000) $2,000

$(10,000) –0–

(AICPA adapted)

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