I sure could use some help here.
Dunn Corporation owns 100% of Grey Corporation’s common stock. On January 2, 2001, 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 2001 and 2002 consolidated net income would be an increase (decrease) of

2001 2002
a ($8,000) $2,000
b ($8,000 $0
c ($10,000) $2,000
d ($10,000) $0
e $8,000 $2,000

The answer I turned in was (c) becasue $30 - $40K = ($10K) and $10K/5 = $2K. Is there someone out there that can confirm that I am right or not in giving this as my answer. and if not what is the correct answer. Thanks!

Mathandler1

The answer I turned in was (c) becasue $30 - $40K = ($10K) and $10K/5 = $2K. Is there someone out there that can confirm that I am right or not in giving this as my answer. and if not what is the correct answer. Thanks!

Mathandler1

Wow! I cannot believe my eyes that no one is out there that does not have his/her own thoughts regarding this question. I figure that there would be more than zero out there that would be respond with confirmation of either that I was correct or I was totally off the track with my answer. I really am interested in knowing if someone else has come up with the same asnswer as I did or with a different one. Thanks!

sreeves5268

well, all I know is I have the same question... and letter e is not one of the options I am given for an answer, so it def isnt E!!!