Prepare consolidation spreadsheet for intercompany sale of equipment $-$ Equity method

Assume that a parent company acquired its subsidiary on January $1,2012,$ at a purchase price that was

$$300,000$ in excess of the book value of the subsidiary's Stockholders' Equity on the acquisition date. O

that excess, $$200,000$ was assigned to a Customer List that is being amortized over a $10-$year period. Th

remaining $$100,000$ was assigned to Goodwill.

In January of $2015,$ the wholly owned subsidiary sold Equipment to the parent for a cash price of

$$120,000.$ The subsidiary had acquired the equipment at a cost of $$140,000$ 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 $4$ years at the time of sale. The parent retained the depreciation

policy of the subsidiary and depreciated the equipment over its remaining $6-$year useful life.

Financial statements of the parent and its subsidiary for the year ended December $31,2016$ follow in

part f$.$ below. The parent uses the equity method to account for its Equity Investment. The Customer Lis

was amortized as part of the parent's equity method accounting.

a$.$ Prepare the journal entry that the subsidiary made to record the sale of the equipment to the parent

the journal entry that the parent made to record the purchase, and the $[$I$]$ entries for the year of sale.