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On January 1, Pepperoni Corp. sold a machine for $900,000 to Sausage Corp., its wholly owned subsidiary. Pepperoni paid $1.2 million for this machine, which
On January 1, Pepperoni Corp. sold a machine for $900,000 to Sausage Corp., its wholly owned subsidiary. Pepperoni paid $1.2 million for this machine, which had accumulated depreciation of $400,000 when it is sold to Sausage. On January 1, Pepperoni and Sausage both estimated a $200,000 salvage value and depreciated the machine on the straight-line method over 20 years. In Pepperonis December 31 consolidated balance sheet, this machine should be reported at the net value of A. $865,000 B. $750,000 C. $800,000 D. $900,000
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