Calculating Consolidated Amounts: Equipment Transfer — Downstream On 1/1/05 Facto Inc. sold equipment to its 100%-owned subsidiary, Sacto Inc., for $800,000. The equipment cost Facto

$1,000,000; accumulated depreciation at the time of the sale was $400,000. Facto has depreciated the equipment over 1 0 years using the straight-line method and no salvage value.

Determine the amounts at which the cost and accumulated depreciation should be reported in the consolidated balance sheet at 12/31/05 under each of the following assumptions:

1. Sacto does not revise the estimated remaining life.

2. Sacto assigns an estimated remaining life of 8 years.