On December $31,202,$ Keith Company, an $80\%$ owned subsidiary of Omega, Inc., transferred equipment with a $10-$year life $($six of which remain with no salvage value$)$ to Omega in

exchange for $$132,000$ cash. At the date of transfer, Keith's records carried the equipment at a cost of $$200,000$ less accumulated depreciation of $$80,000.$ Straight$-$line depreciation is

used. Keith reported net income of $$32,000$ for $202.$ In preparing financial statements for $202,$ how does this transfer affect the computation of consolidated net income?

Increase net income by $$20,000.$

Decrease net income by $$12,000.$

Decrease net income by $$11,000.$

Increase net income by $$2,000.$