Final answer:
From a consolidated financial statement perspective, an intra-entity sale of a depreciable asset at a price above its carrying amount has no impact on the consolidated financials because intercompany gains are eliminated in the consolidation process.
Step-by-step explanation:
When an intra-entity sale of a depreciable asset occurs at a price in excess of the asset's carrying amount, from a consolidated entity perspective, the correct option is (c) No Impact on Consolidated Financials.
Here's why: In a consolidated financial statement, intercompany transactions are eliminated. If a parent company sells an asset to a subsidiary, or vice versa, at a price higher than its carrying amount, there would be a gain recognized in the selling entity's standalone financials. However, this gain is not realized from the perspective of the consolidated entity, because the transaction is internal.
Consolidation accounting requires eliminating such transactions to avoid inflating revenues, expenses, profits, and assets within the consolidated group. Therefore, the gain is eliminated in the consolidation process, and as a result, there is no impact on the consolidated financial statements. The increase in accumulated depreciation resulting from the higher sales price would also be adjusted during consolidation, thus reflecting the original cost basis of the asset.