Reference no: EM132503323

On January 1, 2018, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $340,000 in cash. The equipment had originally cost $306,000 but had a book value of only $187,000 when transferred. On that date, the equipment had a five-year remaining life.

• Depreciation expense is computed using the straight-line method.
• Ackerman reported $440,000 in net income in 2018 (not including any investment income) while Brannigan reported $144,200.
• Ackerman attributed any excess acquisition-date fair value to Brannigan's unpatented technology, which was amortized at a rate of $5,400 per year.

Question 1: What is consolidated net income for 2018?

Question 2: What is the parent's share of consolidated net income for 2018 if Ackerman owns only 90 percent of Brannigan?

Question 3: What is the parent's share of consolidated net income for 2018 if Ackerman owns only 90 percent of Brannigan and the equipment transfer was upstream?

Question 4: What is the consolidated net income for 2019 if Ackerman reports $460,000 (does not include investment income) and Brannigan $155,600 in income? Assume that Brannigan is a wholly owned subsidiary and the equipment transfer was downstream.