1 M2 Preparing a consolidated income statement-Equity method with noncontrolling Interest, AAP and upstream and downstream intercompany inventory profits parent company purchased a 70 contro interest ini sudary several years. The feautof the control and no controlling interest 51 225.000 in excess of the days Shout the action date. The ecces was attied to building that wanted to be undervalued by $200,000 and to an unrecorded patent valued at $525.000. The building assetis eing deprecated wer 20 year period and the potent being amortie over any perle, both on the line with no salvage walue. During the current year, the parent and subsidiary reported to 1.100.000 ofercompany sales the pening of the current year, there were so primer comparty profits in the parents entory At the end of the current year, there 5710.000 of demostra intercomary roles in the subsidiary inventory During the condary declared and paid $200,000 of dividends. The parent companyies the equity method of minden ter booking athcomary reports the followincome statement for the currenty tyr Pure Subsidiary Ime G 1.00 10000 to 10 Come home of $145.230 pm by the parent company is promotionnement De US with your new 1 1000 TI Cost of goods sold Gross profit Income (loss) from subsidiary Operating expenses Net income (6,800,000) (2,100,000) 3,200,000 1,400,000 145,250 (1.800,000) (945,000) $1,545,250 $455,000 a. Compute the income (loss) from subsidiary of $145,250 reported by the parent co Do not use negative signs with your answers below. Subsidiary's net income $ 455,000 87,500 Upstream sales 140,000 Adjusted subsidiary income $ 507,500 P% of interest 70 % 355,250 Downstream sales 210,000 Income (loss) from subsidiary: 5 145,250 b. Prepare the consolidated income statement for the current year. Do not use negative signs with your answers below. Consolidated Income Statement Sales $ 11,400,000 Cost of goods sold 6,870,000 Gross profit 4,530,000 Operating expenses 2,832,500 Net income 1,697,500 Net income attributable to noncontrolling interests 110.250 x Net income attributable to the parent 1,587.250 x