On January 1, 2017, Lime Inc. acquired 80,000 common shares of Stone Corp. for $900,000.

On January 1, 2017 Stone's balance sheet showed the following shareholders' equity: $3 cumulative preferred shares, 20,000 shares issued $120,000 Common shares, 100,000 shares issued $600,000 Surplus (Deficit) ($10,000)* $710,000 *

Stone's preferred share dividends were one year in arrears on that date.

Stone's fair values approximated its book values on that date with the following exceptions: •

Inventory had a fair value that was $30,000 higher than its book value.

Plant and equipment had a fair value $10,000 lower than their book value. •

The plant and equipment had an estimated remaining useful life of 10 years from the date of acquisition.

The financial statements of Lime Inc. and its subsidiary Stone Corp. on December 31, 2020 are shown below: LIME Inc. STONE Corp. RETAINED EARNINGS STATEMENTS Balance, January 1, 2020 $200,000 $370,000 Net Income $350,000 $222,000 Less: dividends ($25,000) ($100,000) Retained earnings $525,000 $492,000

BALANCE SHEETS Cash $120,000 $3,000 Accounts receivable $270,000 $255,000 Inventory $165,000 $144,000 Land $210,000 Plant and equipment $1,200,000 $2,100,000 Accumulated depreciation ($690,000) ($900,000) Investment in Stone (common) $900,000 Total Assets $2,175,000 $1,602,000 Accounts payable $276,000 $330,000 Accrued liabilities $24,000 $30,000 Preferred shares $150,000 Common shares $1,350,000 $600,000 Retained earnings $525,000 $492,000 Total Liabilities and Equity $2,175,000 $1,602,000

Other Information: • Intercompany sales of inventory for 2020 were as follows: Lime to Stone: $50,000 Stone to Lime: $40,000 • Unrealized intercompany profits in inventory for 2020 were as follows: January 1, 2020: Stone’s Inventory $10,000 Lime’s Inventory $20,000 December 31, 2020: Stone’s Inventory $6,000 Lime’s Inventory $8,000 •

On January 1, 2018, Stone sold equipment to Lime for $30,000.

The equipment had a carrying value of $27,000 on that date and an estimated useful life of 3 years.

The inventory on hand at the start of 2020 was sold to outsiders during the year. • Both companies are subject to a tax rate of 40%.

There were no dividends in arrears on December 31, 2019.

Lime uses the cost method to account for its investment in Stone.

Compute the Consolidated Net Income for 2020 and show its allocation between the controlling and non-controlling interests.

Do not prepare an Income Statement.