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Problem 5-9 (LO 5-7) Thomson Corporation owns 70 percent of the outstanding stock of Stayer, Incorporated. On January 1, 2016, Thomson acquired a building with
Problem 5-9 (LO 5-7) Thomson Corporation owns 70 percent of the outstanding stock of Stayer, Incorporated. On January 1, 2016, Thomson acquired a building with a 10- year life for $480,000. Thomson depreciated the building on the straight-line basis assuming no salvage value. On January 1, 2018, Thomson sold this building to Stayer for $401,600. At that time, the building had a remaining life of eight years but still no expected salvage value. In preparing financial statements for 2018, how does this transfer affect the computation of consolidated net income? Multiple Choice 0 Net income is reduced by $19,800. 0 Net income is reduced by $9,760. 0 Net income is reduced by $17,600. 0 Net income is reduced by $15,400
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