On January 1, Year 1, Entity A acquired 60% of Entity B's voting interests for $100,000. The carrying amount of Entity B's assets and liabilities on that date equals their fair values. The noncontrolling interest (NCI) is measured at its fair value of $50,000. Entity A and Entity B use the same accounting principles, and no consolidating adjustments need to be made for intraentity transactions, etc., except as described below.

The trial balances on December 31, Year 1, of Entity A and Entity B before consolidation are presented below.

Account Entity B Entity A

Cash $ 124,000 $69,000

Trade receivables 36,000 29,000

Inventories 63,000 34,000

Current investments -- 24,000

PPE (net) 106,000 50,000

Investment in Entity B -- 100,000

Trade payables (29,000) (52,000)

Liability for employee benefits (43,000) (62,000)

Noncurrent loans payable (90,000) --

Common stock (33,000) (40,000)

Additional paid-in capital (37,000) (21,000)

Retained earnings January 1, Year 1 (55,000) (78,000)

Net sales (150,000) (120,000)

Cost of sales 50,000 61,000

General and administrative expenses 8,000 17,000

Interest expense 4,000 6,000

Dividend income received from

Entity B -- (24,000)

Income tax expense 6,000 7,000

Dividends declared and paid 40,000 --

Additional information:

In its separate financial statements, Entity A accounts for its investment in the subsidiary (Entity B) according to the cost model. Thus, dividends from the subsidiary are recognized as income.

During Year 1, Entity B distributed a cash dividend of $40,000.

On December 31, Year 1, Entity A sold on credit an inventory item with a cost of $20,000 to Entity B for $28,000. This item is in Entity B's inventory at year end.

Note: To simplify the simulation, items of other comprehensive income are not included.

Complete Entity A's year-end consolidated income statement. Enter the appropriate amounts in the designated cells below. Enter all amounts as positive values. If no entry is necessary, enter a zero (0).