Diamond Company owns 80 percent of Emerald and Emerald owns 90 percent of Sapphire, Inc....

Diamond Company owns 80 percent of Emerald and Emerald owns 90 percent of Sapphire, Inc. Separate operating income totals for the current year follow; they contain no investment income. None of these acquisitions required amortization expense. Included in Sapphire’s income is a $50,000 unrealized gain on intra-entity transfers to Emerald.