Petunia Company Owns 100% of Sage Corporation

Petunia Company owns 100% of Sage Corporation.On January 1, 2014 Petunia sold equipment to Sage at a gain.Petunia had owned the equipment for four years and used a ten-year straight-line rate with no residual value.Sage is using an eight-year straight-line rate with no residual value.In the consolidated income statement, Sage's recorded depreciation expense on the equipment for 2014 will be reduced by

A) 10% of the gain on sale.
B) 12 1/2% of the gain on sale.
C) 80% of the gain on sale.
D) 100% of the gain on sale.