Following are separate income statements for Austin, Inc., and its 80 percent owned subsidiary, Rio Grande Corporation as well as a consolidated statement for the business combination as a whole.

	Austin				Rio Grande				Consolidated
Revenues	$	(760,000	)		$	(540,000	)		$	(1,300,000	)
Cost of goods sold		420,000				320,000				740,000
Operating expenses		120,000				66,000				215,000
Equity in earnings of Rio Grande		(104,000	)
Individual company net income	$	(324,000	)		$	(154,000	)
Consolidated net income									$	(345,000	)
Noncontrolling interest in consolidated net income										(21,000	)
Consolidated net income attributable to Austin									$	(324,000	)

Additional Information

• Annual excess fair over book value amortization of $45,000 resulted from the acquisition.
• The parent applies the equity method to this investment.
• Austin has 70,000 shares of common stock and 11,000 shares of preferred stock outstanding. Owners of the preferred stock are paid an annual dividend of $30,000, and each share can be exchanged for three shares of common stock.
• Rio Grande has 32,000 shares of common stock outstanding. The company also has 8,000 stock warrants outstanding. For $15, each warrant can be converted into a share of Rio Grandes common stock. Austin holds half of these warrants. The price of Rio Grandes common stock was $20 per share throughout the year.
• Rio Grande also has convertible bonds, none of which Austin owned. During the current year, total interest expense (net of taxes) was $42,000. These bonds can be exchanged for 10,000 shares of the subsidiarys common stock.