P Company Bought 60% of the Common Stock of S $\begin{array}{lrr} & 2014 & 2015 \\\text { P Company } & \$ 280,000 & \$ 210,000 \\\text { S Company } & 70,000 & 105,000\end{array}$

Essay

P Company bought 60% of the common stock of S Company on January 1, 2014.On January 1, 2014 there was an intercompany sale of equipment at a gain of $63,000.The equipment had an estimated remaining life of six years.Net incomes of the two companies from their own operations (including sales to affiliates) were as follows: $\begin{array}{lrr} & 2014 & 2015 \\\text { P Company } & \$ 280,000 & \$ 210,000 \\\text { S Company } & 70,000 & 105,000\end{array}$