Consolidation subsequent to date of acquisition$-$Equity method with noncontrolling interest, AAP and gain on upstream intercompany equipment sale depreciation and amortization, with no salvage value. had depreciated the equipment for $6$ years at the time of sale. The parent retained the depreciation policy of the subsidiary and depreciated the equipment over its remaining $4$ year useful life.

Following are pre$-$consolidation financial statements of the parent and its subsidiary for the year ended December $31,2016.$ The parent uses the equity method to account for its Equity Investment.

$\backslash$table$[[$Parent$,$Subsidiary,Parent,Subsidiary$],[$Income statement:,,,Balance sheet:,,$],[$Sales$,$$$3,400,000,$$$900,000,$Assets,,$],[$Cost of goods sold,$(2,400,000),(500,000),$Cash,$$619,500,$$$250,000$Consolidation subsequent to date of acquisition$$Equity method with noncontrolling interest $,$ AAP and gain on upstream intercompany equipment sale

A parent company acquired its $75\%$ interest in its subsidiary on January $1,2011.$ On the acquisition date, the total fair value of the controlling interest and the noncontrolling interest was $$350,000$ in excess of the book value of the subsidiary$$s Stockholders$$ Equity. All of that excess was allocated to a Royalty Agreement, which had a zero book value in the subsidiary$$s financial statements $($i$.$e$.,$ there is no Goodwill$).$ The Royalty Agreement has a $7$ year estimated remaining economic life on the acquisition date. Both companies use straight line depreciation and amortization, with no salvage value.

In January $2014,$ the subsidiary sold Equipment to the parent for a cash price of $$250,000.$ The subsidiary acquired the equipment at a cost of $$480,000$ and depreciated the equipment over its $10-$year useful life using the straight$-$line method $($no salvage value$).$ The subsidiary had depreciated the equipment for $6$ years at the time of sale. The parent retained the depreciation policy of the subsidiary and depreciated the equipment over its remaining $4$ year useful life.

Following are pre$-$consolidation financial statements of the parent and its subsidiary for the year ended December $31,2016.$ The parent uses the equity method to account for its Equity Investment.