Final answer:
The depreciation expense on the consolidated income statement remains the same and does not change.
Step-by-step explanation:
The subject of this question is Business and it is at a College level.
In this scenario, Pepper Company sold Salt Inc.'s machinery at its carrying amount of $30,000. Pepper had used the machinery for two years and had already depreciated it using a five-year straight-line method.
Salt Inc. will now use a three-year straight-line depreciation method.
Since the machinery was sold, it no longer appears on Pepper's consolidated income statement and therefore, there is no depreciation expense adjustment needed.
As a result, the depreciation expense on the consolidated income statement remains the same and does not change.