Fullerton Corporation owns 100% of Irvine Corporation's common stock. On January 2, 2020, Fullerton sold machinery with a carrying amount of $30,000 to Irvine Corp for $50,000. Irvine Corp is depreciating the acquired machinery over a 10-year life using the straight-line method. The related net adjustments to compute the 2020 and 2021 consolidated income (gain, loss, depreciation expense, etc.) before income tax would be an increase (decrease) of: Select one: a. $(16,000) for 2020 and $4,000 for 2021 b. $(18,000) for 2020 and $2,000 for 2021 c. $(20,000) for 2020 and $2,000 for 2021 d. $(20,000) for 2020 and $0 for 2021
Fullerton Corporation owns 100% of Irvine Corporation's common stock. On January 2, 2020, Fullerton sold machinery with a carrying amount of $30,000 to Irvine Corp for $50,000. Irvine Corp is depreciating the acquired machinery over a 10-year life using the straight-line method. The related net adjustments to compute the 2020 and 2021 consolidated income (gain, loss, depreciation expense, etc.) before income tax would be an increase (decrease) of: Select one: a. $(16,000) for 2020 and $4,000 for 2021 b. $(18,000) for 2020 and $2,000 for 2021 c. $(20,000) for 2020 and $2,000 for 2021 d. $(20,000) for 2020 and $0 for 2021
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Fullerton Corporation owns 100% of Irvine Corporation's common stock. On January 2, 2020, Fullerton sold machinery with a carrying amount of $30,000 to Irvine Corp for $50,000. Irvine Corp is
Select one:
a. $(16,000) for 2020 and $4,000 for 2021
b. $(18,000) for 2020 and $2,000 for 2021
c. $(20,000) for 2020 and $2,000 for 2021
d. $(20,000) for 2020 and $0 for 2021
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