Portland Inc. (Portland) owns 80% of Seattle Inc. (Seattle) and uses the cost method to account for its investment. The 2023 income statements of both companies are shown below. Portland Seattle Gross profit $100,000 $50,000 Miscellaneous revenues (losses) (30,000) (20,000) Depreciation expense (20,000) (15,000) Income tax expense (20,000 (6,000) Net Income $30,000 $9,000 On January 1, 2023, Seattle acquired equipment for $7,000 and sold it the same day to Portland for $12,000. The equipment had a remaning useful life of 10 years on that date. Both companies are subject to an effective tax rate of 40%.

What is the correct amount of income tax expense appearing on Portland's 2023 consolidated income statement?

$24,860

$24,200

$26,000

$27,800