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At the beginning of the current period, Janelle Ltd sold a depreciable asset to its wholly owned subsidiary, Adam Ltd, for $80000. Janelle Ltd had

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At the beginning of the current period, Janelle Ltd sold a depreciable asset to its wholly owned subsidiary, Adam Ltd, for $80000. Janelle Ltd had originally paid $200000 for this asset, and at time of sale to Adam Ltd had charged accumulated depreciation of $150000. This asset is used differently in Adam Ltd from how it was used in Janelle Ltd; thus, whereas Janelle Ltd used a 10% p.a. straight-line depreciation method, Adam Ltd uses a 20% straight-line depreciation method. In calculating the depreciation expense for the consolidated group (as opposed to that recorded by Adam Ltd), the group accountant, Roger Moore, is unsure of which amount the depreciation rate should be applied to ($200000,$50000 or $80000) and which depreciation rate to use (10% or 20%). Required Provide a detailed response, explaining which depreciation rate should be used and to what amount it should be applied

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