On January 1, 2017, Smeder Company, an 80% owned subsidiary of Collins, Inc., transferred equipment With 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 S48,000. Straight-line depreciation is used. Smeder reported net income of $28,000 and $32,000 for 2017 and 2018, respectively. All net income effects of the intra-entity transfer are attributed to the seller for consolidation purposes 9) What amount of gain should be reported by Smeder Company relating to the equipment for 2017 prior to making consolidating entries? 9) B) S36,000 C)$10,000 E) $12,000. D) $0. A) $34,000. 10) What is the net effect on net income as a result of consolidating adjustments made in 2017 with respect to the equipment transfer? A) Decrease net income by $10,000. B) Increase net income by $2,000. C) Increase net income by $10,000 D) Decrease net income by $12,000. E) Decrease net income by $14,000. 10)