On January 1, 2011, Poe Corp. sold a machine for

$900,000 to Saxe Corp., its wholly owned subsidiary. Poe paid $1,100,000 for this machine, which had accumulated depreciation of $250,000. Poe estimated a $100,000 salvage value and depreciated the machine on the straight-line method over twenty years, a policy which Saxe continued. In Poe’s December 31, 2011 consolidated balance sheet, this machine should be included in cost and accumulated depreciation as Cost Accumulated depreciation

a. $1,100,000 $300,000

b. $1,100,000 $290,000

c. $ 900,000 $ 40,000

d. $ 850,000 $ 42,500