Calculating Consolidated and Parent Company Amounts On 4/30/06, Pal Inc. acquired 75% of Salle Inc.’s outstanding common stock for cash. Both companies have calendar year-ends. Data for each company pertaining to its own separate operations follow: Pal Salle Net Income:

4 months ended 4/30/06 .

8 months ended 12/31/06 Dividends Declared:

4 months ended 4/30/06 .

8 months ended 12/31/06 Amortization of cost in excess of book value recorded by Pal for 2006

$350,000 $100,000 450,000^"

200,000

$800,000 $300,000

$140,000 280,000 $ 40,000 80,000

$420,000 $120,000

$ 24,000 Excludes any amounts relating to Salle.

Required 1. Determine the consolidated net income for 2006 that accrues to the controlling interest.

2. Determine the consolidated dividends declared for 2006.

3. Determine the investment income recorded in the parent’s separate income statement for 2006 under the equity method.