4. Pentamedia owns 90 percent of Sesa. At the start of 2019, Sesa sold buildings carried at $4,000,000, net, to Pentamedia for $6,000,000. The buildings had a remaining life of 10 years and straight-line depreciation is used. Pentamedia uses the complete equity method to record its investment in Sesa. Pentamedia still owns the buildings. How are Pentamedia's 2020 equity in net income of Sesa and 2020 consolidated income to the noncontrolling interest affected by the intercompany sale of buildings?

5. A parent sells land costing $35,000 to a subsidiary in 2019 for $55,000. The subsidiary sells the land in 2021 to a third party for $85,000. On the consolidated income statement for 2021, the gain on sale of land should be reported at: a. $20,000 b. $50,000 c. $30,000 d. $ 0

6. A subsidiary sells land costing $1,000,000 to its parent in 2017 for $1,400,000. The parent owns 80 percent of the subsidiary's stock. In 2020, the parent sells the land to an outside party for $550,000. What elimination entry (I) is required on the 2020 consolidation working paper? a. Debit the subsidiary's beginning retained earnings and credit the loss on sale of land for $400,000. b. Debit investment in subsidiary and credit the loss on sale of land for $400,000. c. Debit the subsidiary's beginning retained earnings and credit the loss on sale of land for $450,000. d. Debit investment in subsidiary and credit the loss on sale of land for $450,000.