On January 1, Poe Corp. sold a machine for $4,369,577 to Saxe Corp., its wholly-owned...
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On January 1, Poe Corp. sold a machine for $4,369,577 to Saxe Corp., its wholly-owned subsidiary. Poe paid $1.1 million for this machine, which had accumulated depreciation of $250,000 on the sale date. Poe estimated a $100,000 salvage value and depreciated the machine on the straight-line basis over 20 years, a policy that Saxe continued. In Poe's December 31 consolidated balance sheet, the accumulated depreciation of this machine should be shown on the consolidated balance sheet as:
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