Preparing a consolidated income statement-Equity method with noncontrolling interest and AAP A parent company purchased a 65% controlling interest in its subsidiary several years ago. The aggregate fair value of the controlling and noncontrolling interest was $750,000 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 $450,000 and to an unrecorded patent valued at $300,000. The building asset is being depreciated over a 20-year period and the patent is being amortized over a 10-year period, both on the straight-line basis with no salvage value. During the current year, the subsidiary declared and paid $120,000 of dividends. The parent company uses the equity 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 $6,000,000 $1,800,000 (4,200,000) (1,080,000) 1,800,000 720,000 129,675 (1,140,000) (468,000) $789,675 $252,000 Net income a. Compute the Income (loss) from subsidiary of $129,675 reported by the parent company in its preconsolidation income statement. Do not use negative signs with your answers below. Subsidiary's net income $ AAP $ Adjusted subsidiary income P % of interest X % Income (loss) 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 . $ Check