Equity Method Income Statement

Perky International Corporation purchased Singing Manufacturing Company on January 02, 20x7.The acquisition was for 100% control of all voting stock of Singing Manufacturing Company.

On December 30, 20x7, the controller provided the following information to prepare the net income and retained earnings statements for the two companies.

Perky Corporation Singing Company

Sales 1,000,000 300,000

Cost of goods sold 400,000 100,000

Depreciation expenses 100,000 50,000

Other expenses 100,000 50,000

Dividends declared 50,000 25,000

Retained earnings 500,000 100,000

1/2/20x7

Directions: Net income statement and retained earnings statement for consolidated.

A.Net Income Statement 20x7

Parent's net income XXX

Parent's equity income from subsidiary XXX

Subsidiary net income20x7 XXX

Consolidated net income XXX

B. Retained Earnings (RE) Statement

Parent's beginning RE from operations XXX

Parent's income from operations XXX

Parent's income from subsidiary in 20x7 XXX

Parent's dividend to stockholders XXX

Consolidated retained earnings XXX