A parent company purchased a 70% controlling interest in its subsidiary several years ago. The aggre- gate fair value of the controlling and noncontrolling interest was $450,000 in excess of the subsidiary's Stockholders' Equity on the acquisition date. This excess was assigned to a building that was estimated to be undervalued by $270,000 and to an unrecorded patent valued at $180,000. The building is being depreciated over a 20-year period and the patent is being amortized over a 10-year period, both on the straight-line basis with no salvage value. During the current year, the subsidiary declared and paid $36,000 of dividends. The parent company uses the equity method of pre-consolidation investment bookkeeping. Each company reports the following income statement for the current year: Parent Subsidiary Income statement: Sales....... Cost of goods sold Gross profit..... Income (loss) from subsidiary. Operating expenses. Net income.... $8,100,000 (5,760,000) 2,340,000 103,950 (1,620,000) $ 823,950 $1,080,000 (630,000) 450,000 0 (270,000) $ 180,000 a. Compute the Income (loss) from subsidiary of $103,950 reported by the parent company in its pre-consolidation income statement. b. Prepare the consolidated income statement for the current year. A parent company purchased a 70% controlling interest in its subsidiary several years ago. The aggre- gate fair value of the controlling and noncontrolling interest was $450,000 in excess of the subsidiary's Stockholders' Equity on the acquisition date. This excess was assigned to a building that was estimated to be undervalued by $270,000 and to an unrecorded patent valued at $180,000. The building is being depreciated over a 20-year period and the patent is being amortized over a 10-year period, both on the straight-line basis with no salvage value. During the current year, the subsidiary declared and paid $36,000 of dividends. The parent company uses the equity method of pre-consolidation investment bookkeeping. Each company reports the following income statement for the current year: Parent Subsidiary Income statement: Sales....... Cost of goods sold Gross profit..... Income (loss) from subsidiary. Operating expenses. Net income.... $8,100,000 (5,760,000) 2,340,000 103,950 (1,620,000) $ 823,950 $1,080,000 (630,000) 450,000 0 (270,000) $ 180,000 a. Compute the Income (loss) from subsidiary of $103,950 reported by the parent company in its pre-consolidation income statement. b. Prepare the consolidated income statement for the current year