Fundamentals of Advanced Accounting 5th Edition by Joe Ben Hoyle,Thomas Schaefer,Timothy Doupnik

Exercise 11

Dunn Corporation owns 100 percent of Grey Corporation's common stock. On January 2, 2012, Dunn sold to Grey $40,000 of 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 2012 and 2013 consolidated net income would be an increase (decrease) of