Punn Corporation owns all the common stock of Prey Inc. On January 2, 2017, Punn sells a machine with a book value of $30,000 to Prey for $40,000. Prey uses straight-line depreciation and intends to...

Punn Corporation owns all the common stock of Prey Inc. On January 2, 2017, Punn sells a machine with a book value of $30,000 to Prey for $40,000. Prey uses straight-line depreciation and intends to use the machine for five years. The adjustments (net) needed to compute the consolidated net income (before tax) for the years 2017 and 2018 are: