Question 2 Not complete Marked out of 10.00 Flag question Preparing a consolidated income statement-Equity method with noncontrolling interest and AAP 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 $450,000 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 $270,000 and to an unrecorded patent valued at $180,000. The building 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 $36,000 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 Net income $8,100,000 $1,080,000 (5.760,000) (630,000) 2,340.000 450,000 103.950 (1.620,000) (270,000) $823,950 $180,000 a. Compute the Income (loss) from subsidiary of $103,950 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 $ 0 % of interest 96 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