Preparing a consolidated income statement-Cost method with noncontrolling interest and AAP 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 $280,000 in excess of the subsidiary's Stockholders' Equity on the acquisition date. This excess was assigned to a building that was estimated to be undervalued by $200,000 and to an unrecorded Customer List valued at $80,000. The building asset is being depreciated over a 10-year period and the Customer List is being amortized over a 5-year period, both on the straight-line basis with no salvage value. During the current year, the subsidiary declared and paid $90,000 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: Subsidiary Parent Income statement: Sales Cost of goods sold Gross profit Income (loss) from subsidiary Operating expenses Net income $11,000,000 $1,200,000 (7,400,000) (720,000) 3,600,000 480,000 81,000 (3,280,000) (352,000) $401,000 $128,000 a. Starting with the parent's current-year pre-consolidation net income of $401,000, compute the amount of current-year net income attributable to the parent that will be reported in the consolidated financial statements. Do not use negative signs with your answers below. $ Do not use negative signs with your answers below. Reconciliation of Cost to Equity Method Parent's pre-consolidation net income Dividend Income P% x Net income of subsidiary P% x AAP amortization Net income attributable to controlling interest $ b. Prepare the consolidated income statement for the current year. Do not use negative signs with your answers below. Consolidated Income Statement Sales Cost of goods sold Gross profit Operating expenses $ $ Check