On January $1,2021,$ Magazine had common stock of $120,000$ and retained earnings of $260,000.$ During that year, Magazine reported sales of $130,000,$ cost of goods sold $70,000,$ and operating expenses of $40,000.$ On January $1,2020$ Magazine had retained earnings of $220,000$ with no dividend payment.

On January $1,2019,$ Royal, Inc acquired $90$ percent of Magazine outstanding voting stock. At that date, $60,000$ of the acquisition$-$date fair value was assigned to unrecorded customer lists $(20$ years remaining life$)$ and $20,000$ to undervalued R&D $(10$ year remaining life$).$

In $2020,$ Magazine sold inventory costing $9,000$ to Royal for $15,000.$ of this merchandise, Royal continued to hold $5,000$ at the year$-$end. During $2021,$ Magazine transferred inventory again costing $11,000$ to Royal for $20,000.$ Royal still held half of these items at year$-$end.

On January $1,$ Royal sold equipment to Magazine for $12,000.$ The asset originally cost $16,000$ but had a January $1,2020,$ book value of $9,000.$ At the time of transfer, the equipment's remaining life was to be $5$ years.

Equity method has been applied for this investment

a$.$ Prepare worksheets adjustment entries only related to the equipment and inventory transfers for both years $2020$ and $2021.$

b$.$ Compute NCI share of income in Magazine and Equity income in Magazine in $2020$

c$.$ Compute NCI share of income in Magazine and Equity income in Magazine in $2021$