Preparing the [I] consolidation entries for sale of depreciable assets-Equity method Assume that on January 1, 2016, a parent sells to its wholly owned subsidiary, for a sale price of $162,000, equipment that originally cost $184,000. The parent originally purchased the equipment on January 1, 2012, and depreciated the equipment assuming a 10- year useful life (straight-line with no salvage value). The subsidiary has adopted the parent's depreciation policy and depreciates the equipment over the remaining useful life of 6 years. The parent uses the equity method to account for its Equity Investment. a. Compute the annual pre-consolidation depreciation expense for the subsidiary (postintercompany sale) and the parent (pre-intercompany sale). Subsidiary-depreciation $ 27,000 Parent-depreciation $ 18,400 b. Compute the pre-consolidation Gain on Sale recognized by the parent during 2016. $ 51,600 c. Prepare the required [1] consolidation entry in 2016 (assume a full year of depreciation). Description Debit Credit [Igain] Equipment 22,000 Gain on sale 51,600 0 Accumulated depreciation + 0 73,600 [dep] Accumulated depreciation 8,600 0 Depreciation expense = 0 8,600 d. Prepare the required [1] consolidation entry in 2019 (assuming the subsidiary is still holding the equipment). Description [gain] Equipment Debit 54,000 x Credit Equity investment = 127,600 x 0 Accumulated depreciation 0 181,600 x [Idep] Accumulated depreciation 18,400 x 0 Depreciation expense 0 27,000 x R