Reference no: EM132820395

Question - Company A acquires 80% of outstanding shares of Company B. On 1/1/2016, parent Company sold to subsidiary company machines at a price of 18,000 $, noting that the cost of machines in parent books was 25,000 $ and the balance of the accumulated depreciation of machines was 9,000 $, the remaining life of the machines is 4 years, and the machines were consumed using the straight-line method. Company B estimated the useful life of the machines as 3 years and decided to consume them using the sum-of-the-years method. The net profit of subsidiary at the end of 2016 is 40,000$, and 80,000$ in 2017.

Required - Find the difference of depreciation expense between parent and subsidiary in 2017?