I'M ONLY LOOKING FOR NUMBER 3.

(Requirment 3 )

On January 1, 2021PCo acquired 60% ownership of S Ltd. On the acquisition date all identifiable assets and liabilities had book values equal to fair values. P uses the cost method to record its investment in S. For external reporting purposes consolidated statements are required. However, the purchase did result in the acquisition of goodwill of $55,000. During the past few years, a number of transactions have taken place: 1) Inter-company downstream sales during 2025 were 200,000 . An unrealized profit of 18,000 still remains in the unsold ending inventory. The beginning inventory included an unrealized profit of 9,000 related to last year's downstream inter-company sales. 2) Inter-company upstream sales during 2025 were 70,000 . An unrealized profit of 8,000 remains in the unsold ending inventory. There were no inter-company upstream sales last year. 3) On January 3, 2023, P sold equipment to S for 100,000 . The equipment had a net book value of $75,000 and a remaining useful life of 10 years on the date of sale. 4) On July 8,2025,5 sold land to P for $167,000. The land had a book value of $155,000. The land remained within the consolidated entity for the entire 2025 year. 5) Goodwill impairment for 2025 was 5,500 . 6) The following financial information is available for the year ending Dec 31 , 2025: Required 1. Prepare an intercompany profit analysis schedule 2025 to show before tax, tax and after-tax impacts of intercompany inventory, land and equipment sales. Both companies use a 40% tax rate. (10 marks) 2. Use your schedule in part 1 above to calculate consolidated net income for 2025 . Show attribution to both shareholder groups. ( 8 marks) 3. Assume the following account balances for each company for 2025 : Find consolidated balances for each of the above accounts for the year ended 2025. Show your calculations using the direct method. (7 marks) TIP - feel free to make the worksheet entries to help you with your calculations