A Non-Current Asset Was Sold by Subsidiary Limited to Parent

Multiple Choice

A non-current asset was sold by Subsidiary Limited to Parent Limited during the 2013/14 financial year.The carrying amount of the asset at the time of the sale was $700 000.As part of the consolidation process,the following journal entry was passed. $\begin{array}{|l|r|r|}\hline 30 \text { June } 2014 & & \\\hline \text { Dr Profit on sale of asset } & 200000 & \\\hline \text { Dr Asset } & 300000 & \\\hline \text { Cr Accumulated depreciation } & & 500000 \\\hline\end{array}$ What (a) amount did Parent Limited pay Subsidiary Limited for the asset; (b) was the cost of the asset as shown in the books of Subsidiary Limited?

A) (a) $900 000; (b) $1 400 000
B) (a) $900 000; (b) $1 200 000
C) (a) $700 000; (b) $1 200 000
D) (a) $900 000; (b) $800 000