*Downstream Depreciable Assets transaction On January 1, 2021, Penn Company purchased 80% of the outstanding common shares of Senn Company. On January 2 2021, Penn Company sold equipment with an original cost of $2,000 and a carrying value of $1,200 to Senn Co for $1,500. Penn Co. had owned the equipment for two years and used a five-year straight line depreciation with no residual value. Senn Co. is using straight-line depreciation over three years with no residual value. Senn Co. reported net income of $3,000 and Penn reported separate operating income (excluding income from Senn Co.) of $5,000 during 2021. Q1. Prepare eliminating (consolidation) entries for intercompany transactions on December 31, 2021. (1) Elimination of excess depreciation because of the sales of equipment Account Debit Credit Accumulated Depreciation Account Debit Credit Gain on sale Q2. Prepare Penn Co's fully adjusted equity method journal entries to eliminate intercompany transaction (1) Deferral of gain on sale of equipment Account Debit Credit (2) Reversal of the deferred gain (Depreciation difference) Account Debit Credit What is the consolidated net income? Q2. Answer: What is the net income attributable to NCI (NCI in NI)? Q3. Answer: What is the Net Income attributable to Controlling Interest (Controlling Interest Net Income)? Q4