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On January 1, 2009, Payton Co. sold equipment to its subsidiary, Starker Corp., for $115,000. The equipment had cost $125,000 and the balance in accumulated depreciation was $45,000. The equipment had an estimated remaining useful life of eight years and $0 salvage value. Both companies use straight-line depreciation. On their separate 2009 income statements, Payton and Starker reported depreciation expense of $84,000 and $60,000, respectively. The amount of depreciation expense on the consolidated income statement for 2009 would have been:

A. $144,000

B. $148,375

C. $109,000

D. $134,000

E. $139,625

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M976082

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