Pease Corporation owns 100% of Sade Corporation common stock. On January 2, 2016, Pease sold machinery with a carrying amount of $30,000 to Sade for $50,000

Sade is depreciating the acquired machinery over a 5-year life using the straight-line method. The related net adjustments to compute the 2016 and 2017 consolidated income before income tax would be an increase (decrease) of

2016 2017
a. $(16,000) $4,000
b. $(16,000) $0
c. $(20,000) $4,000
d. $(20,000) $0

a