A parent owns all of its subsidiary. At the beginning of the current year, the parent sells equipment carried on its books at $40,000
to its subsidiary for $50,000. The equipment has a 2-year remaining life, straight-line.
What is the effect of the above on equity in net income for the current year, reported on the parent's books, assuming the parent
uses the complete equity method?
A) $8,000 decrease
B) $5,000 decrease
C) $4,000 decrease
D) No effect