Baywatch Industries has owned 80 percent of Tubberware Corporation for many years. On January 1, 20X6, Baywatch paid Tubberware $213,000 to acquire equipment that Tubberware had purchased on January 1, 20X3, for $231,000. The equipment is expected to have no scrap value and is depreciated over a 15-year useful life.

a. Compute the amount reported as consolidated net income for 20X8.

b. By what amount would consolidated net income change if the equipment sale had been a downstream sale rather than an upstream sale?

c. Record the entry to eliminate the gain on the equipment and to correct the asset's basis.

Record the entry to adjust Accumulated Depreciation.