On 1/1/2018, PanAm acquired 90% of Salisbury Company for $200,000. At the date of acquisition, the Fair Values of Salisbury’s assets and liabilities were equal to F.V. except for Overvalued Inventory by $25,000 (sold in 2018) Overvalued Equipment by $80,000 (5 years remaining useful life) Following the Income Statement for the 2 companies for 2018: Sales Revenue - C.G.S Gross Profit - Operating Exp. Income from Salisbury Net income PanAm $700,000 (450,000) 250,000 (120,000) ? ? Salisbury $430,000 (280,000) 150,000 (70,000) ----- 80,000 

Instructions: Prepare the Consolidated Income Statement For PanAm and its Subsidiary Salisbury for the year 2018.