Peggy Company owns 75% of Sally Inc. and uses the cost method to account for its investment. The following data were taken from the Year 4 income statements of the two companies:

In Year 2, Sally sold equipment to Peggy at a gain of $15,000. Peggy has been depreciating this equipment over a five-year period. Sally did not pay any dividends in Year 4. Use income tax allocation at a rate of 40%.
Required:
(a) Calculate consolidated profit attributable to Peggy€™s shareholders for Year 4.
(b) Prepare a consolidated income statement for Year 4.
(c) Calculate the deferred income tax asset that would appear on the Year 4 consolidated statement of financial position.

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Peggy Sally Revenues Miscellaneous expenses Depreciation expense Income tax expense Total expenses $580,000 $270,000 85,000 97,000 35,000 395,000 217,000 $185,000 $53,000 110,000 162,000 123,000 Profit