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.

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	-

• n 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.

• Net sales
  Cost of sales
  Dividend income
  Net income
  Net income attributable to the NCI
  Net income attributable to the parent