A parent company purchased a 70% controlling interest in its subsidiary several years ago. The aggregate fair value of the controlling and noncontrolling interest was $650,000 in excess of the subsidiarys Stockholders Equity on the acquisition date. This excess was assigned to a building that was estimated to be undervalued by $390,000 and to an unrecorded patent valued at $260,000. 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 $52,000 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	$11,700,000	$1,560,000
Cost of goods sold	(8,320,000)	(910,000)
Gross profit	3,380,000	650,000
Income (loss) from subsidiary	150,150	-
Operating expenses	(2,340,000)	(390,000)
Net income	$1,190,150	$260,000

a. Compute the Income (loss) from subsidiary of $150,150 reported by the parent company in its preconsolidation income statement.

Do not use negative signs with your answers below.

Subsidiary's net income
AAP
Adjusted subsidiary income
P % of interest	X		%
Income (loss) from subsidiary

b. Prepare the consolidated income statement for the current year.

Do not use negative signs with your answers below.

Consolidated Income Statement
Sales
Cost of goods sold
Gross profit
Operating expenses
Net income attributable to noncontrolling interestsNet income attributable to the parentNet income
Net income attributable to noncontrolling interestsNet income attributable to the parentNet income
Net income attributable to noncontrolling interestsNet income attributable to the parentNet income