Company P purchased an 80% interest (8,000 shares) in Company S for $800,000 on January 1, 2015. Company S’s equity on that date was $900,000. Any excess of cost over book value was attributed to equipment with a 10-year life. On January 1, 2019, Company S’s equity was $1,200,000. Company S earned $200,000, evenly, during 2019. In December 2019, Company S paid $10,000 in dividends. Company P had internally generated net income of $150,000. On July 1, 2019, there was a sale of Company S stock, for $150 per share, to outside interests by Company P. Consider these situations:

• Company P sells all 8,000 shares.
• Company P sells 2,000 shares.
• Company P sells 6,000 shares.

For each of these situations:

a. How will the sale be recorded?
b. Will consolidated statements be prepared for 2019? If so, what will be consolidated net income, and what will be the distribution to the NCI?
c. If consolidated statements will not be prepared, what will be reported by the parent for its income from Company S?