X Co$.$ acquired $80\%$ of Y Co$.$ on January $1,$ Year $3,$ when Y Co$.$ had common shares of $$140,000$ and retained earnings of $$74,000.$ The acquisition differential was allocated as follows on this date:

Inventory $ $64,000$

Equipment $(15-$year life$)51,000$

Total acquisition differential $ $115,000$

Since this date the following events have occurred:

Year $3$

Y Co$.$ reported a net income of $$134,000$ and paid dividends of $$29,000.$

On July $3,$ X Co$.$ sold land to Y Co$.$ for $$120,000.$ This land was carried in the records of X Co$.$ at $$79,000.$

On December $31,$ Year $3,$ the inventory of X Co$.$ contained an intercompany profit of $$34,000.$

X Co$.$ reported a net income of $$440,000$ from its own operations.

Year $4$

Y Co$.$ reported a net loss of $$20,000$ and paid dividends of $$9,000.$

Y Co$.$ sold the land that it purchased from X Co$.$ to an unrelated company for $$134,000.$

On December $31,$ Year $4,$ the inventory of Y Co$.$ contained an intercompany profit of $$16,000.$

X Co$.$ reported a net income from its own operations of $$76,000.$

Required:

Assume a $40\%$ tax rate.