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How is parent equity in net income of subsidiary affected

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Question - On January 1, 2018, a 70%-owned Subsidiary company sold truck to its Parent company for $60,000. The Subsidiary's books showed original cost and accumulated depreciation of $80,000 and $44,000, respectively, at the date of sale. The equipment had a remaining life of four years, and is straight-line depreciated.

How is Parent's 2018 equity in net income of Subsidiary affected by the intercompany sale of truck?

a. $12,600 decrease

b. $6,000 increase

c. $4,200 increase

d. $18,000 decrease

Reference no: EM132522140

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