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	$	11,000,000		$	6,100,000
Gain on sale of equipment					260,000
Other income		900,000			60,000
		11,900,000			6,420,000
Depreciation expense		550,000			190,000
Other expenses		6,700,000			4,400,000
Income tax expense		2,010,000			549,000
		9,260,000			5,139,000
Net income	$	2,640,000		$	1,281,000

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 $1,100,000 and reported a gain of $260,000. On this date, the equipment had a remaining useful life of four years.
• On January 31, Year 5, Jingya paid a dividend of $700,000.

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. (Do not round intermediate answer. Round your final answer to nearest whole dollar. Omit $ sign in your response.)

Consolidated net income $

(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? (Omit $ sign in your response.)

Accounts	Income Statement of	Account Balance
(Click to select) Gain on sale of equipment Sales Depreciation expense Other expenses Net income Other income Income tax expense Everything would be the same	Goodkey	$
(Click to select) Gain on sale of equipment Other expenses Other income Net income Everything would be the same Income tax expense Sales Depreciation expense	Jingya	$
(Click to select) Sales Gain on sale of equipment Everything would be the same Depreciation expense Other expenses Other income Net income Income tax expense	Consolidated	$

(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? (Omit $ sign in your response.)

Accounts	Income Statement of	Account Balance
(Click to select) Income tax expense Gain on sale of equipment Everything would be the same Net income Depreciation expense Other income Other expenses Sales	Goodkey	$
(Click to select) Net income Other income Gain on sale of equipment Other expenses Income tax expense Depreciation expense Sales Everything would be the same	Jingya	$
(Click to select) Gain on sale of equipment Depreciation expense Net income Other expenses Income tax expense Sales Everything would be the same Other income	Consolidated	$