In its 20X7 consolidated income statement, Skekel Development Company reported consolidated net income of \(\$ 921,000\) and \(\$ 45,000\) of income assigned to the 30 percent noncontrolling interest in its only subsidiary, Subsidence Mining, Inc. During the year, Subsidence had sold a previously mined parcel of land to Skekel for a new housing development; the sales price to Skekel was \(\$ 500,000\) and the land had a carrying amount at the time of sale of \(\$ 560,000\). At the beginning of the previous year, Skekel had sold excavation and grading equipment to Subsidence for \(\$ 240,000\); the equipment had a remaining life of six years as of the date of sale and a book value of \(\$ 210,000\). The equipment originally had cost \(\$ 350,000\) when purchased by Skekel on January 2, 20X2. The equipment never was expected to have any salvage value.

Skekel had purchased its investment in Subsidence Mining 12 years ago for a price that was \(\$ 300,000\) in excess of the book value of the shares acquired; all the excess over the book value was attributable to intangible assets with a remaining life of 20 years from the date of combination. Both parent and subsidiary use straight-line amortization and depreciation.

\section*{Required}

a. Present the journal entry made by Skekel to record the sale of equipment in \(20 \mathrm{X} 6\) to Subsidence Mining.

b. Present all elimination entries related to the intercompany transfers of land and equipment that should appear in the consolidation workpaper used to prepare a complete set of consolidated financial statements for \(20 \times 7\).

c. Compute Subsidence Mining's \(20 \times 7\) net income.

d. Compute Skekel's \(20 \times 7\) income from its own separate operations, excluding any investment income from its investment in Subsidence Mining.