Dunn Corporation owns 100 percent of Grey Corporations common stock. On January 2, 2010, Dunn sold to

Question:

Dunn owns 100 percent of Grey Corporation’s common stock. On January 2, 2010, Dunn sold to Grey for $40,000 machinery with a carrying amount of $30,000. Grey is depreciating the acquired machinery over a five-year life by the straight-line method. The net adjustments to compute 2010 and 2011 consolidated net income would be an increase (decrease) of 2010 . 2011
a. $(8,000) . $2,000
b. $(8,000) ... –0–
c. $(10,000) ... $2,000
d. $(10,000) .. –0–

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...