Pinto Inc. owns 100% of Scale Inc. The following information is from the 2014 income statements of Pinto and Scale:

Additional Information:
1. Pinto€™s reported sales revenue includes $200,000 of intra-entity sales to Scale. Scale sold three-fourths of this inventory to outside customers by the end of 2014. Pinto sells to Scale on terms similar those available to its outside customers.
2. Scale purchased equipment from Pinto for $60,000 on January 1, 2014. The equipment is depreciated using the straight-line method with no residual value and eight years of life remaining as of January 1, 2014.

Required:
1. How much intra-entity profit should be eliminated from Scale€™s inventory when preparing 2014 consolidated financial statements?
2. What amount of depreciation expense should be reported in the 2014 consolidated incomestatement?

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Pinto Scale $600,000 540,000 60,000 15,000 30,000 15,000 Sales Cost of goods sold S1,000,000 600,000 400,000 60,000 130,000 210,000 6.000 226,000 Gross profit Depreciation expense Other expenses Income from operations Gain on sale of equipment to Scale Income before income taxes $ 15,000