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 $283,500, equipment that originally cost $322,000. The parent originally purchased the equipment on January 1, 2012, and depreciated the equipment assuming a 10-year useful lile (straight-line with no salvage value). The subsidiary has adopted the parents depreciation policy and depreciates the equipment over the remaining useful lile ol 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 ipostintercompany sale) and the parent (pre-intercompany sale). Subsidiary-depreciation $ 47,250 Parent - depreciation $ 32,200 b. Compute the pre-consolidation Gain on Sale recognized by the parent during 2016. $ 90,300 . C. Prepare the required [I] consolidation entry in 2016 (assume a full year of depreciation). Description Debit Credit [lgain Equipment 38.500 0 Grant sur . 0 Accumulated dcoreclation : 128.800 [ldep] Accumulated depreciation 15,050 0 Depreciation Experise 15.050 d. Prepare the required [I] consolidation entry in 2019 (assuming the subsidiary is still holding the equipment). Description Debit Credit wait quipment a Equity investment + Accumulated depreciation [lides) Arrummulated ceperitiari . 15,050 Depreciation expense O 15,050 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 $283,500, equipment that originally cost $322,000. The parent originally purchased the equipment on January 1, 2012, and depreciated the equipment assuming a 10-year useful lile (straight-line with no salvage value). The subsidiary has adopted the parents depreciation policy and depreciates the equipment over the remaining useful lile ol 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 ipostintercompany sale) and the parent (pre-intercompany sale). Subsidiary-depreciation $ 47,250 Parent - depreciation $ 32,200 b. Compute the pre-consolidation Gain on Sale recognized by the parent during 2016. $ 90,300 . C. Prepare the required [I] consolidation entry in 2016 (assume a full year of depreciation). Description Debit Credit [lgain Equipment 38.500 0 Grant sur . 0 Accumulated dcoreclation : 128.800 [ldep] Accumulated depreciation 15,050 0 Depreciation Experise 15.050 d. Prepare the required [I] consolidation entry in 2019 (assuming the subsidiary is still holding the equipment). Description Debit Credit wait quipment a Equity investment + Accumulated depreciation [lides) Arrummulated ceperitiari . 15,050 Depreciation expense O 15,050