Answer:
C. $340,000
Explanation:
Compute the Subsidiary's Unrealized Profit
This will help to determine, this will help us get the amount by which the Equipment Account will be reduced.
First, we calculate the Unrealized profit made on selling of the equipment
The equipment was sold for $520,000
The original cost to the Subsidiary was $200,000.
Furthermore, the Accumulated Depreicaiton of the Asset = $20,000
The Net Book Value of the Equipment = Cost - Accumulated Depreciation
The Net Book Value = $200,000 - $20,000 = $180,000
The Profit on Sale of the Equipment
= Sales Value - The Net Book Value
= $520,000 - $180,000 = $340,000
