A Company owns 60% of B Company.

• In 20X1 A sold land to B for $400,000. The land had a cost to A of $150,000.
• In 20X4 B sold the land it had purchased from A in the transaction above.B sold the land to an unrelated party for $430,000.

How much gain on the 20X4 land sale will be included in the consolidated net income for 20X4?

A owns 80% of B.

• On 1/1/20X4, A sells a machine to B and records a $30,000 gain.
• On that date, the machine has a remaining useful life of 15 years

What overall effect will all the consolidating worksheets adjustments related to this transaction have on consolidated net income for 20X4?

A. reduce consolidated net income by $2,000

B. reduce consolidated net income by $28,000

C. no effect

D. reduce consolidated net income by $32,000

E. reduce consolidated net income by $30,000

F. increase consolidated net income by $2,000