Preparing a consolidated income statement-Equity method with noncontrolling interest, AAP and upstream and downstream Intercompany inventory profits A parent company purchased a 70% controlling interest in its subsidiary several years ago. The aggregate fair value of the controlling and noncontrolling interest was $1,050,000 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 $600,000 and to an unrecorded patent valued at $450,000. The building asset is being deprecated over a 15-year period and the patent is being amortized over an 10 year period, both on the straight line basis with no salvage value. During the current year, the parent and subsidiary reported a total of 1,800,000 of intercompany sales. At the beginning of the current year, there were $120,000 of upstream intercompany profits in the parent's inventory. At the end of the current year, there were $180,000 of downstream Intercompany profits in the subsidiary's inventory. During the current year, the subsidiary declared and paid $240,000 of dividends. The parent company user the equity method of pre-consolidation investmert bookkeeping. Each company reports the following income statement for the current year Subsidiary Income statement Sales 06.800,000) (1.100.000) 260.500 1.200.000 Income from wory 117,500 Operating experts 11.517.00 Parent $10.000.000 53.000.000 Cost of goods sold ou pro 100.000 10.000 190.000 Netico a Compute the income foss) from subsidiary of 5117,500 reported by the parent company in its preconsolidation income statement Do not use negative signs with your answers below Subsidiary's natin 5 MAP Upstream Adre Pointer X Down income stromy a. Compute the income (loss) from subsidiary of $117,500 reported by the parent company in its preconsolidation income statement Do not use negative signs with your answers below. Subsidiary's net income 5 AAP Upstream sales Adjusted subsidiary income PM of interest $ X Downstream sales Income Doss) from subsidiary 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 5 Chech