On January $1,2022,$ a subsidiary sold equipment to its parent for $$600,000.$ The subsidiary$$s original cost was $$300,000$ and as of January $1,2022,$ $$100,000$ in depreciation had been recorded on the subsidiary$$s books. At the date of sale, the equipment had a $5-$year remaining life, straight$-$line. It is now December $31,2025(4$ years since the sale$),$ and the parent still holds the equipment.

How should this equipment be reported on the December $31,2025$ consolidated balance sheet and $2025$ income statement?

Select one:

a$.$

Equipment $($cost$)$Accumulated Depreciation$--$EquipmentDepreciation Expense$$300,000$$$160,000$$$60,000$

b$.$

Equipment $($cost$)$Accumulated Depreciation$--$EquipmentDepreciation Expense$$600,000$$$320,000$$$80,000$

c$.$

Equipment $($cost$)$Accumulated Depreciation$--$EquipmentDepreciation Expense$$300,000$$$260,000$$$40,000$

d$.$

Equipment $($cost$)$Accumulated Depreciation$--$EquipmentDepreciation Expense$$600,000$$$260,000$$$40,000$