Company P purchases an 80% interest in Company S on January 1, 20X1, for $500,000.

Company S had an equity of $450,000 on that date. On July 1, 20X6, Company P purchased another 10% interest for $150,000. Company S’s equity was $550,000 on January 1, 20X6, and it earned $50,000 evenly during 20X6. For each investment, any excess of cost over book value was attributed to equipment with a 10-year life. Company P had internally generated net income of $120,000 during 20X6. Calculate consolidated income for 20X6 and the distribution of consolidated income to the noncontrolling and controlling interests.

AppendixLO1