Downstream Depreciable Assets transaction 2 On January 1, 2022, Penn Company purchased 80% of the outstanding common shares of Senn Company. 3 On January 2 2022, Penn Company sold equipment with an original cost of $80,000 and a carrying value of $48,000 to Penn Co for $54,000. 4 Penn Co. had owned the equipment for two years and used a five-year straight-line depreciation with no residual value. 5 Senn Co. is using straight-line depreciation over three years (remaining useful life) with no residual value. 6 Senn Co. reported net income of $80,000 and Penn reported a separate operating income (excluding income from Senn Co.) of $ 100,000 during 2022. 7 8

Q1. Prepare eliminating (consolidation) entries for intercompany transactions on December 31, 2021. (1) Elimination of Gain(Loss) from intercompany sale (4 points) 9 10 Account Debit Credit 11 12 13 4 (2) Elimination of excess depreciation (2 points) Debit Account Credit 5

Q2. Answer: What is the consolidated net income?

Q3. What is the net income attributable to NCI (NCI in NI)?

Q4 What is the Net Income attributable to Controlling Interest (Controlling Interest Net Income)?

Answer rating: 100% (QA)

Q1 Prepare eliminating consolidation entries for intercompany transactions on December 31 2021 1 Eli... View the full answer