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3. (20 points) Powell Company owns 80% of the outstanding common stock of Sullivan Company. Powell Company uses cost method. In 2014-2016, the following events
3. (20 points) Powell Company owns 80% of the outstanding common stock of Sullivan Company. Powell Company uses cost method. In 2014-2016, the following events occurred. 1. On June 30, 2014, Sullivan Company sold equipment to Powell Company for $481,400. The equipment cost Sullivan Company $721,800 and had accumulated depreciation of $410,000 on the date of the sale. The management of Powell Company estimated that the equipment had a remaining useful life of four years from June 30, 2014. 2. On January 1, 2015, Sullivan Company sold land to Powell Company for $590,900. S Company originally purchased the land for $413,900. 3. On January 1, 2016, Powell Company sold the land purchased from Sullivan Company to a company outside the affiliated group for $690,300. Also we have following information for Powell and Sullivan Co. 2014 2015 2016 Powell company's NI in Powell's book Sullivan's NI Sullivan's Dividend 273,100 293,800 345,920 384,000 194,000 204,700 20,000 25,000 28,000 For 2014, 2015 and 2016, determine NI att. to Powell (In the exam pool, we had this as the controlling interest in consolidated net income). It is obvious that you need to show consolidated net income and NCI income
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