On January 1, 2017, a subsidiary sold equipment to its parent for $600,000. The subsidiary's original cost was $300,000 and as of January 1, 2017, $100,000 in depreciation had been recorded on the subsidiary's books. At the date of sale, the equipment had a 5-year remaining life, straight-line. It is now December 31, 2020 (4 years since the sale), and the parent still holds the equipment.
How should this equipment be reported on the consolidated balance sheet and income statement?
$\begin{array} { c c c c }
& \begin{array} { c }
\text { Equipment } \
\text { (cost) }
\end{array} & \begin{array} { c }
\text { Accumulated } \
\text { Depreciation-Equipment }
\end{array} & \begin{array} { c }
\text { Depreciation } \
\text { Expense }
\end{array}\end{array}$

Question

On January 1, 2017, a subsidiary sold equipment to its parent for $600,000. The subsidiary's original cost was $300,000 and as of January 1, 2017, $100,000 in depreciation had been recorded on the subsidiary's books. At the date of sale, the equipment had a 5-year remaining life, straight-line. It is now December 31, 2020 (4 years since the sale), and the parent still holds the equipment.
How should this equipment be reported on the consolidated balance sheet and income statement?
 $\begin{array} { c c c c } 
& \begin{array} { c } 
\text { Equipment } \
\text { (cost) }
\end{array} & \begin{array} { c } 
\text { Accumulated } \
\text { Depreciation-Equipment }
\end{array} & \begin{array} { c } 
\text { Depreciation } \
\text { Expense }
\end{array}\end{array}$

Quizplus · Accepted Answer

The Answer of On January 1, 2017, a subsidiary sold equipment to its parent for $600,000. The subsidiary's original cost was $300,000 and as of January 1, 2017, $100,000 in depreciation had been recorded on the subsidiary's books. At the date of sale, the equipment had a 5-year remaining life, straight-line. It is now December 31, 2020 (4 years since the sale), and the parent still holds the equipment.
How should this equipment be reported on the consolidated balance sheet and income statement?
 $\begin{array} { c c c c } 
& \begin{array} { c } 
\text { Equipment } \
\text { (cost) }
\end{array} & \begin{array} { c } 
\text { Accumulated } \
\text { Depreciation-Equipment }
\end{array} & \begin{array} { c } 
\text { Depreciation } \
\text { Expense }
\end{array}\end{array}$

On January 1, 2017, a Subsidiary Sold Equipment to Its