Use the Following Information to Answer the Question(s)below

question 11

Multiple Choice

Use the following information to answer the question(s) below.
On January 1,2010,Shrimp Corporation purchased a delivery truck with an expected useful life of five years,and a salvage value of $8,000.On January 1,2012,Shrimp sold the truck to Pacet Corporation.Pacet assumed the same salvage value and remaining life of three years used by Shrimp.Straight-line depreciation is used by both companies.On January 1,2012,Shrimp recorded the following journal entry:
Pacet holds 60% of Shrimp.Shrimp reported net income of $55,000 in 2012 and Pacet's separate net income (excludes interest in Shrimp) for 2012 was $98,000.
-Parrot Company owns all the outstanding voting stock of Southern Manufacturing.On January 1,2012,Parrot sold machinery to Southern at its book value of $24,000.Parrot had the machinery three years before selling it and used an eight-year straight-line depreciation method,with zero salvage value.Southern will use the straight-line depreciation method,and assumes the machine has five years remaining and no salvage value.In the 2012 consolidating working papers,the depreciation expense

• A)required no adjustment.
• B)decreased by $4,800.
• C)increased by $4,800
• D)increased by $8,000.

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Definitions:

Nonparametric Statistics

Statistics used with data that cannot be assumed to have a normal distribution.

T Test

A statistical test used to compare the means of two groups and determine if they are significantly different from each other.

Chi-square Test

A method of statistical analysis utilized to ascertain the presence of a meaningful relationship between two variables of a categorical nature.

T Test

A statistical test used to compare the means of two groups to determine if there is a significant difference between them.