On January $1,$ Year $4,$ Goodkey Co$.$ acquired all of the common shares of Jingya. The condensed income statements for the two

companies for January, Year $5,$ were as follows:

The following transactions occurred in January, Year $5,$ and are properly reflected in the income statements above:

On January $1,$ Year $5,$ Jingya sold equipment to Goodkey for $$1,190,000$ and reported a gain of $$278,000.$ On this date, the

equipment had a remaining useful life of four years.

On January $31,$ Year $5,$ Jingya paid a dividend of $$790,000.$

Goodkey uses the cost method to account for its investment in Jingya. Both companies pay income tax at the rate of $40\%.$

Required:

$($a$)$ Prepare a consolidated income statement for January, Year $5.($Input all values as positive numbers. Leave no cells blank $-$ be

certaln to enter $"$O$"$ wherever required. Do not round your Intermedlate calculatlons. Round your final answer to nearest whole

dollar. Omlt $ sign In your response.$)$

$($b$)$ Now assume that Goodkey uses the equity method to account for its investment in Jingya. What accounts would change on the

three income statements $($Goodkey$,$ Jingya, and consolidated$)$ in January, Year $5,$ and what would be the account balances? $($If optlon

"Everything would be the same" Is selected, update the net Income In the Account balance fleld. Omit $ sign In your response.$)$

$($c$)$ Now assume that Goodkey only owns $80\%$ of the common shares of Jingya and uses the cost method to account for its investment

in Jingya. What accounts would change $($as compared to part $($a$))$ on the three income statements $($Goodkey$,$ Jingya, and consolidated$)$

in January, Year $5,$ and what would be the account balances? $($If optlon "Everything would be the same" Is selected, update the net

Income In the Account balance fleld. Do not round your Intermediate calculations. Round your final answer to nearest whole

dollar. Omlt $ sign In your response.$)$On January $1,$ Year $4,$ Goodkey Co$.$ acquired all of the common shares of Jingya. The condensed income statements for the two companies for January, Year $5,$ were as follows:

Goodkey Jingya

Sales $ $11,900,000$ $ $6,190,000$

Gain on sale of equipment $278,000$

Other income $990,00069,000$

$12,890,0006,537,000$

Depreciation expense $640,000199,000$

Other expenses $6,790,0004,490,000$

Income tax expense $2,037,000554,400$

$9,467,0005,243,400$

Net income $ $3,423,000$ $ $1,293,600$

The following transactions occurred in January, Year $5,$ and are properly reflected in the income statements above:

On January $1,$ Year $5,$ Jingya sold equipment to Goodkey for $$1,190,000$ and reported a gain of $$278,000.$ On this date, the equipment had a remaining useful life of four years.

On January $31,$ Year $5,$ Jingya paid a dividend of $$790,000.$

Goodkey uses the cost method to account for its investment in Jingya. Both companies pay income tax at the rate of $40\%.$

Required:

$($a$)$ Prepare a consolidated income statement for January, Year $5($b$)$ Now assume that Goodkey uses the equity method to account for its investment in Jingya. What accounts would change on the three income statements $($Goodkey$,$ Jingya, and consolidated$)$ in January, Year $5,$ and what would be the account balances?c$)$ Now assume that Goodkey only owns $80\%$ of the common shares of Jingya and uses the cost method to account for its investment in Jingya. What accounts would change $($as compared to part $($a$))$ on the three income statements $($Goodkey$,$ Jingya, and consolidated$)$ in January, Year $5,$ and what would be the account balances?