A owns 80% of B.

On the date of acquisition, the goodwill was $88,000. This acquisition took place in 2018.

In January 1 2020 A sold equipment to B. The book value of this equipment was $100,000. The gain before tax, on this sale, was $50,000. This equipment is being depreciated over the next 15 years, no residual value.

The tax rate for both companies is 40%

The fiscal year end for both companies is December 31.

In 2020, income before Taxes earned by Company A is $1,000,000; while income before taxes for company B is $350,000.

What would the consolidated depreciation expense for 2020 for this acquisition of A by B that would appeared on the consolidated income statement? What would be the profit realized by the consolidated entity attributable to this intercompany transaction between Company and B, in 2021?