1)Petunia Company owns 100% of Sage Corporation. On January 1, 2017 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, Sages recorded depreciation expense on the equipment for 2017 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.

2)Petunia Corporation owns 100% of Stone Companys 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

Please show all the work so I can learn from that....thanks