X Co. acquired 75% of Y Co. on January 1, Year 3, when Y Co. had common shares of $260,000 and retained earnings of $86,000. The acquisition differential was allocated as follows on this date:

Inventory	$	76,000
Equipment (15-year life)		69,000
Total acquisition differential	$	145,000

Since this date the following events have occurred:

Year 3

Y Co. reported a net income of $166,000 and paid dividends of $41,000.

On July 3, X Co. sold land to Y Co. for $144,000. This land was carried in the records of X Co. at $91,000.

On December 31, Year 3, the inventory of X Co. contained an intercompany profit of $46,000.

X Co. reported a net income of $560,000 from its own operations.

Year 4

Y Co. reported a net loss of $32,000 and paid dividends of $9,000.

Y Co. sold the land that it purchased from X Co. to an unrelated company for $166,000.

On December 31, Year 4, the inventory of Y Co. contained an intercompany profit of $28,000.

X Co. reported a net income from its own operations of $88,000.

Required:

Assume a 40% tax rate.

(a) Prepare X Co.s equity method journal entries subsequent to the date of acquisition for each of Years 3 and 4. (Input all values as positive numbers. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Input all values as positive numbers.)

Year 3

Year 4

(b) Calculate consolidated net income attributable to X Co.s shareholders for each of Years 3 and 4. (Omit $ sign in your response.)

	Consolidated Net Income
Year 3	$
Year 4	$

(c) Prepare a statement showing the changes in non-controlling interest in each of Years 3 and 4. (Net loss amount should be indicated with a minus sign and input all other amounts as positive values. Omit $ sign in your response.)

Changes in Non-controlling Interest
Years 3 and 4
(Click to select) Balance Jan. 1 Year 3 Allocation of Y Co.'s adjusted net income Year 3 Allocation of Y Co.'s adjusted net loss Year 3 Balance Dec. 31, Year 3 Allocation of Y Co.'s adjusted net income Year 4 Allocation of Y Co.'s adjusted net loss Year 4 Balance Dec. 31, Year 4	$
(Click to select) Balance Jan. 1 Year 3 Allocation of Y Co.'s adjusted net income Year 3 Allocation of Y Co.'s adjusted net loss Year 3 Balance Dec. 31, Year 3 Allocation of Y Co.'s adjusted net income Year 4 Allocation of Y Co.'s adjusted net loss Year 4 Balance Dec. 31, Year 4
(Click to select) Less: Dividends Add: Dividends
(Click to select) Balance Jan. 1 Year 3 Allocation of Y Co.'s adjusted net income Year 3 Allocation of Y Co.'s adjusted net loss Year 3 Balance Dec. 31, Year 3 Allocation of Y Co.'s adjusted net income Year 4 Allocation of Y Co.'s adjusted net loss Year 4 Balance Dec. 31, Year 4
(Click to select) Balance Jan. 1 Year 3 Allocation of Y Co.'s adjusted net income Year 3 Allocation of Y Co.'s adjusted net loss Year 3 Balance Dec. 31, Year 3 Allocation of Y Co.'s adjusted net income Year 4 Allocation of Y Co.'s adjusted net loss Year 4 Balance Dec. 31, Year 4
(Click to select) Less: Dividends Add: Dividends
(Click to select) Balance Jan. 1 Year 3 Allocation of Y Co.'s adjusted net income Year 3 Allocation of Y Co.'s adjusted net loss Year 3 Balance Dec. 31, Year 3 Allocation of Y Co.'s adjusted net income Year 4 Allocation of Y Co.'s adjusted net loss Year 4 Balance Dec. 31, Year 4	$

(d) Now assume that X Co. is a private company, uses ASPE, and chooses to use the equity method. Calculate the balance in the Investment in Y Co. account as at December 31, Year 4. (Omit $ sign in your response.)

Investment in Y Co. - December 31, Year 4