Photo Industries has owned 80 percent of Shutter Corporation for many years. On January 1, 20X6, Photo paid Shutter $264,000 to acquire equipment that Shutter had purchased on January 1, 20X3, for $291,000. The equipment is expected to have no scrap value and is depreciated over a 15-year useful life.

Photo reported operating earnings of $100,000 for 20X8 and paid dividends of $35,000. Shutter reported net income of $40,000 and paid dividends of $25,000 in 20X8.

Note: Leave no cell blank, enter "0" wherever required.

Required:

A. Compute the amount reported as consolidated net income for 20X8.

B. By what amount would consolidated net income change if the equipment sale had been a downstream sale rather than an upstream sale?.

C. Prepare the consolidation entry or entries required to eliminate the effects of the intercompany sale of equipment in preparing a full set of consolidated financial statements at December 31, 20X8.

Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.