Parsons, Inc. owns 80% of Strap Corporation.

• On the date of acquisition, Strap had a patent worth $70,000 that had a 10 year estimated life.
• Parsons sold inventory to Strap Corporation in 20X4. The deferred profit on the sale was $40,000. Strap sold the inventory to an unrelated party in 20X5. There are no intercompany sales in 20X5.
• Parsons has $600,000 of separate company net income for 20X5. This does not include any equity income from Strap.
• Strap has $400,000 of separate company net income for 20X5

1. What will Parsons report as equity income from Strap for 20X5? (This is income form Strap reported by Parsons under the equity method of accounting.)

2. What will be reported as income attributable to Parsons on the consolidated income statement for 20X5?