Lion Company has owned 100 percent of Fish Company since 2010. The income statements of these two companies for the year ended December 31, 2011, follow.

The following is additional information:

(1) Fish purchased $280,000 of inventory from Lion, which it had sold to Fish customers by the end of the year.

(2) Fish leased its building from Lion for $60,000 per year.

Prepare a consolidated income statement work sheet for the two companies for the year ended December 31, 2011. Income taxes have been ignored.

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Lion Company Net sales Cost of goods sold Gross margin Less: Sclling expenses $1,500,000 750,000 $ 750,000 S 250,000 300,000 $ 550,000 $ 200,000 60,000 260,000 Fish Company S600,000 400,000 S200,000 S 50,000 100,000 General and administrative expenses Total operating expenses Income from operations Other income Net income 50,000 S 50,000