Preparing a consolidated income statementCost method with noncontrolling interest, AAP and upstream intercompany depreciable asset profits A parent company purchased a 90% controlling interest in its subsidiary several years ago. The aggregate fair value of the controlling and noncontrolling interest was $322,000 in excess of the subsidiarys Stockholders Equity on the acquisition date. This excess was assigned to a building that was estimated to be undervalued by $210,000 and to an unrecorded patent valued at $112,000. The building asset is being depreciated over a 12-year period and the patent is being amortized over an 8-year period, both on the straight-line basis with no salvage value. During a previous year, the subsidiary sold to the parent company a piece of depreciable property. The unconfirmed upstream gain on this intercompany transaction was $140,000 at the beginning of the current year. The upstream gain confirmed each year is $28,000. During the current year, the subsidiary declared and paid $105,000 of dividends. The parent company uses the cost method of pre-consolidation investment bookkeeping. Each company reports the following income statement for the current year:

Income statement:

Sales $4,600,000 $1,750,000

Cost of goods sold (3,280,000) (1,078,000)

Gross profit 1,320,000 672,000

Income (loss) from subsidiary 94,5000

Operating expenses (960,000) (448,000)

Net income $454,500 $224,000

a. Starting with the parents current-year pre-consolidation net income of $454,500, compute the amount of current-year net income attributable to the parent that will be reported in the consolidated financial statements.

Reconciliation of Cost to Equity Method

Parent's pre-consolidation net income - ??

Dividend Income - ??

P% x Net income of subsidiary - ??

P% x AAP amortization - ??

P% of Upstream profit - ??

Net income attributable to controlling interest - ??

Prepare the consolidated income statement for the current year.

Sales - ??

COGS - ??

Gross Profit - ??

Operating Expenses - ??

Net Income - ??

Net Income attributable to noncontrolling interests - ??

Net income attributable to parent - ??

Please fill in the ?? blanks.