$2\mathrm{.}9$

points

Time Remaining $1$ hour $2$ minutes $12$ seconds$01$:$02$:$12$

Item $7$

Time Remaining $1$ hour $2$ minutes $12$ seconds$01$:$02$:$12$

On January $1,2023,$ Smeder Company, an $80\%$ owned subsidiary of Collins, Incorporated, transferred equipment with a $10-$year life $($six of which remain with no salvage value$)$ to Collins in exchange for $$84,000$ cash. At the date of transfer, Smeder$$s records carried the equipment at a cost of $$120,000$ less accumulated depreciation of $$48,000.$ Straight$-$line depreciation is used. Smeder reported net income of $$28,000$ and $$32,000$ for $2023$ and $2024,$ respectively. All net income effects of the intra$-$entity transfer are attributed to the seller for consolidation purposes.

What amount of gain should be reported by Smeder Company relating to the equipment for $2023$ prior to making consolidating entries?

Multiple Choice

$$10,000$

$$12,000$

$$0$

$$36,000$

$$34,000$