Calculating Consolidated and Parent Company Amounts On 9/30/06, Port Inc. acquired all of Shipp Inc.’s outstanding common stock for cash. Both companies have calendar year-ends. Data for each company pertaining to its own separate operations follows:

Port Shipp Net Income:

9 3

months months ended ended 9/30/06 12/31/06

.

.

. $700,000

. 200,000“

$280,000 120,000

$900,000 $400,000 Dividends Declared:

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months months ended ended 9/30/06 12/31/06

.

.

. $150,000

. 50,000 $ 75,000 25,000

$200,000 $100,000 Amortization of cost in excess of book value . . $8,000

^ Excludes any amounts relating to Shipp.

Required 1. Determine the consolidated net income for 2006.

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.