When working on a consolidation and you are only given the Stockholders Equity of the acquiree, and the assests are revalued lower (i.e. equipment was found to be worth $10,000 less than book value and has a 10 year life with straight line depreciation) How do I figure out Equity in Net Income? I have no actual fair value of the equipment that I can find in this practice problem.

Here it is for you:

Equity Method and Eliminating Entries, First Year

On July 1, 2019, Prestige Communications acquired all of the voting stock of Southern Light Technologies for $300 million in cash. At the date of acquisition, Southern Lights shareholders equity accounts were as follows (in millions):

Capital stock	$26
Retained earnings	142
Accumulated other comprehensive income	5
Treasury stock	(1)
Total	$172

At the date of acquisition, Southern Lights inventories and property, plant and equipment had a fair value that was $2 million and $10 million lower than book value, respectively. It also had previously unreported brand names, valued at $60 million, meeting the ASC 805 criteria for separate capitalization. Southern Light reports inventories using FIFO, its revalued plant and equipment had a 10-year remaining life, straight-line, and the brand names are indefinite-lived. Both companies have June 30 year-ends.

Southern Light reported $20 million in net income and $500,000 in other comprehensive income in fiscal 2020, and declared and paid $2.5 million in cash dividends. Impairment testing at the end of fiscal 2020 reveals that Southern Lights brand names are impaired by $3 million and goodwill connected with the acquisition is impaired by $5 million in 2020. Southern Lights beginning inventory was sold during fiscal 2020.