Petunia Corporation Owns 100% of Stone Company's Common Stock

Multiple Choice

Petunia Corporation owns 100% of Stone Company's common stock. On January 1, 2017, Petunia sold equipment with a book value of $210,000 to Stone for $300,000. Stone is depreciating the equipment over a ten-year life by the straight-line method. The net adjustments to compute 2017 and 2018 consolidated income would be an increase (decrease) of:

A) 2017, ($90,000) ; 2018, $0
B) 2017, ($90,000) ; 2018, $9,000
C) 2017, ($81,000) ; 2018, $0
D) 2017, ($81,000) ; 2018, $9,000