On January 1, 20X1, Pinto Company purchased an 80% interest in Sands Inc. for $1,000,000. The equity balances of Sands at the time of the purchase were as follows:

Common stock ($10 par)	$100,000
Paid-in capital in excess of par	400,000
Retained earnings	500,000

Any excess of cost over book value is attributable to goodwill.

No dividends were paid by either firm during 20X6. The following trial balances were prepared for Pinto Company and its subsidiary, Sands Inc., on December 31, 20X6:

	Pinto	Sands
Cash	120,000	70,000
Accounts receivable	240,000	197,000
Inventory	200,000	176,000
Land	600,000	180,000
Buildings and equipment	1,100,000	800,000
Accumulated depreciation	(180,000)	(120,000)
Investment in Sands	1,000,000
Accounts payable	(110,000)	(50,000)
Common stock, $10 par	(800,000)	(100,000)
Paid-in capital in excess of par	(660,000)	(400,000)
Retained earnings	(1,340,000)	(650,000)
Sales	(600,000)	(300,000)
Other income	(40,000)	(15,000)
Cost of goods sold	320,000	180,000
Operating expenses	150,000	32,000
Total	-	-

Sands sold a machine to Pinto Company for $40,000 on January 1, 20X6. The machine cost Sands $50,000, and $25,000 of accumulated depreciation had been recorded as of the sale date. The machine had a 5-year remaining life and no salvage value. Pinto Company is using straight-line depreciation.

Since the purchase date, Pinto has sold merchandise for resale to Sands, Inc. at a mark-up on cost of 25%. Sales during 20X6 were $150,000. The inventory of these goods held by Sands was $15,000 on January 1, 20X6, and $18,000 on December 31, 20X6.

Required:

Prepare a consolidated income statement for 20X6, including income distribution schedules to support your distribution of income to the noncontrolling and controlling interest interests.