A parent company acquired 70% of the stock of a subsidiary company on January 1, 2XX1, for $1,022,840. On this date, the balances of the subsidiary's stockholders' equity accounts were Common Stock, $728,000, and Retained Earnings, $78,400. On January 1, 2XX1, the fair value of the 30% of shares not purchased by the parent was $433,160. On January 1, 2XX1, the subsidiary's recorded book values were equal to fair values for all items except two: (1) property, plant, and equipment, net had a book value of $2,240,000 and a fair value of $2,436,000, and (2) patents had a book value of $336,000 and a fair value of $504,000. On the acquisition date, the subsidiary's property, plant, and equipment, net had a remaining useful life of 10 years, and the patents had a remaining useful life of 6 years.

On December 31, 2XX3, the parent sold a building to the subsidiary for $504,000. On this date, the building was carried on the subsidiary's books (net of accumulated depreciation) at $336,000. Both companies estimated that the building has a remaining life of 5 years on the intercompany sale date, with no salvage value. Each company routinely sells merchandise to the other company, with a profit margin of 25 percent of selling price (regardless of the direction of the sale). During 2XX5, intercompany sales amount to $168,000, of which $112,000 of merchandise remains in the ending inventory of the subsidiary. On December 31, 2XX5, $56,000 of these intercompany sales remained unpaid. Additionally, the parent's December 31, 2XX4 inventory includes $84,000 of merchandise purchased in the preceding year from the subsidiary. During 2XX4, intercompany sales amount to $140,000, and on December 31, 2XX4, $67,200 of these intercompany sales remained unpaid.

The parent accounts for its Equity Investment in the subsidiary using the cost method. Unconfirmed profits are allocated pro-rata. The pre-consolidation financial statements for the two companies for the year ended December 31, 2XX5, are provided below:

	Parent	Subsidiary		Parent	Subsidiary
Income statement:			Balance sheet:
Sales	$2,800,000	$1,456,000	Cash	$896,000	$112,000
Cost of goods sold	(1,568,000)	(700,000)	Accounts receivable	1,120,000	280,000
Gross profit	$1,232,000	$756,000	Inventories	1,904,000	448,000
Depreciation & amort. expense	(67,200)	(50,400)	Other assets	438,760	560,000
Operating expenses	(728,000)	(134,400)	Investment in subsidiary	1,022,840	-
Interest expense	(33,600)	(67,200)	PPE, net	8,400,000	2,464,000
Income (loss) from subsidiary	78,400	-	Patent	-	56,000
Net income	$481,600	$504,000	Total assets	$13,781,600	$3,920,000
Statement of retained earnings:
Beginning retained earnings	$3,220,000	$1,624,000
Net income	481,600	504,000	Accounts payable	$2,576,000	$123,200
Dividends declared	(336,000)	(112,000)	Notes payable	5,600,000	884,800
Ending retained earnings	$3,365,600	$2,016,000	Other liabilities	560,000	168,000
			Common stock	1,680,000	728,000
			Retained earnings	3,365,600	2,016,000
			Total liabilities and equity	$13,781,600	$3,920,000

Required: a. Compute the EOY noncontrolling interest equity balance $

b. Please explain how to prepare the consolidation income statement. Note: Use negative signs with answers as appropriate.

Consolidated Income Statement
Sales	Answer
Cost of Goods Sold	Answer
Gross Profit
Depreciation & Amort Expense	Answer
Operating Expenses	Answer
Interest Expense	Answer
Income (loss) from Subsidiary	Answer
Net Income
Consolidated NI attrib to NCI	Answer
Consolidated NI attrib to CI