Lewis Company owns 80 percent of Tomassini Corporations stock. You are told that Tomassini has sold equipment to Lewis and that the following consolidation entries are needed to prepare consolidated statements for 20X9:

Consolidation Worksheet Entries	Debit	Credit
Equipment	20,000
Gain on Sale of Equipment	40,000
Accumulated Depreciation		60,000

Consolidation Worksheet Entries	Debit	Credit
Accumulated Depreciation	5,000
Depreciation Expense		5,000

Which of the following is incorrect?

Multiple Choice

a. The parent paid $ 40,000 in excess of the subsidiarys carrying amount to acquire the asset.

b. From a consolidated viewpoint, depreciation expense as Lewis recorded it is overstated.

c. Consolidated net income will be reduced by $ 40,000 when these consolidation entries are made.

d. The asset transfer occurred in 20X9 before the end of the year.