The following additional information is available: a. On July 1, 2016, Schinzer sells a machine to Fowler for $25,000. The cost of the machine to Schinzer is $16,000. The machine is being depreciated...

The following additional information is available:

a. On July 1, 2016, Schinzer sells a machine to Fowler for $25,000. The cost of the machine to Schinzer is $16,000. The machine is being depreciated on a straight-line basis over five years.

b. Schinzer provides management services to Fowler at a billing rate of $15,000 per year. This arrangement starts in 2016.