On January $1,2019,$ a subsidiary sold equipment to its parent for $$600,000.$ The subsidiary's original cost was $$300,000$ and as of January $1,2019,$ $$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 $31,2023(4$ 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?

Equipment Accumulated Depreciation

$($cost$)$ Depreciation Expense

Question $14$ options:

a$)$

$$300,000$ $$260,000$ $ $40,000$

b$)$

$$300,000$ $$160,000$ $ $60,000$

c$)$

$$600,000$ $$320,000$ $ $80,000$

d$)$

$$600,000$ $$260,000$ $ $40,000$