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Question - On January 1, 2017, a subsidiary sold equipment to its parent for $520,000. The subsidiary's original cost was $200,000 and as of January 1, 2017, $20,000 in depreciation had been recorded on the subsidiary's books. At the date of sale, the equipment had a 10-year remaining life, straight-line. It is now December 31, 2021 (5 years since the sale), and the parent still holds the equipment.
In the consolidation eliminating entries for 2021, determine the beginning retained earnings is debited?
A. $170,000
B. $204,000
C. $192,000
D. $136,000
Determine the balances of the accounts affected by the adjusting entries and prepare an adjusted trial balance.
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