Comparative income statements of Pek Corporation and Slo Corporation for the year ended December 31, 2013, are as follows (in thousands):
Pek Slo
Sales ........................... $6,400 ................ $2,000
Income from Slo ............... 522 .................. -
Total revenue ................... 6,922 ................. 2,000
Less: Cost of goods sold ...... 3,600 ................... 800
Operating expenses ............ 1,600 ................... 600
Total expenses .................. 5,200 ................. 1,400
Net income ..................... $1,722 ................ $ 600
ADDITIONAL INFORMATION
1. Slo is a 90 percent-owned subsidiary of Pek, acquired by Pek for $3,240,000 on January 1, 2011, when Slo's stockholders' equity at book value was $2,800,000.
2. The excess of the cost of Pek's investment in Slo over book value acquired was allocated $120,000 to undervalued inventories that were sold in 2011, $80,000 to undervalued equipment with a four-year remaining useful life, and the remainder to goodwill.
REQUIRED
Prepare a consolidated income statement for Pek Corporation and Subsidiary for the year ended December 31, 2013.