consolidated financial totals
On January 1, 2007, Slaughter sold equipment to Bennett (a wholly owned subsidiary) for $120,000 in cash. The equipment had originally cost $100,000 but had a book value of only $70,000 when transferred. On that date, the equipment had a 5 year remaining life. Depriciation expense is computed using the straight line method. Slaughter earned $220,000 in net income in 2007 (not including investment income) while Bennett reported $90,000.
A. What is the consolidated net income for 2007?
B. What is the consolidated net income for 2007 if Slaughter only owns 90% of Bennett
C. What is the consolidated net income for 2007 if Slaughter only owns 90% of Bennett and the equipment transfer was upstream?
D. What is the consolidated net income for 2008 if Slaughter reports $240,000 (doesn't include the investment income) and Bennett $100,000 in income? Assume that Bennett is a wholly owned subsidiary and the equipment transfer was downstream.