Following are separate income statements for Austin, Inc., and its 80 percentowned subsidiary, Rio Grande Corporation as well as a consolidated statement for the business combination as a whole (credit balances indicated by parentheses).

	Austin		Rio Grande		Consolidated
Revenues	$	(718,000	)		$	(518,000	)		$	(1,236,000	)
Cost of goods sold		418,000				282,000				700,000
Operating expenses		118,000				88,000				231,000
Equity in earnings of Rio Grande		(98,400	)
Individual company net income	$	(280,400	)		$	(148,000	)
Consolidated net income									$	(305,000	)
Noncontrolling interest in consolidated net income										(24,600	)
Consolidated net income attributable to Austin									$	(280,400	)

Additional Information

• Annual excess fair over book value amortization of $25,000 resulted from the acquisition.
• The parent applies the equity method to this investment.
• Austin has 55,000 shares of common stock and 7,000 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 36,000 shares of common stock outstanding. The company also has 8,000 stock warrants outstanding. For $10, 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 $31,000. These bonds can be exchanged for 15,000 shares of the subsidiarys common stock.