Shown below are selected ledger accounts from the trial balance of a parent and its subsidiary as of December 31, Year 10.

	P Co.				S Co.
Investment in bonds of P	$				$	38,800
Investment in shares of S (equity method)		150,899
Sales		663,000				384,000
Interest income						1,900
Equity method income		115,737
Gain on sale of land		3,000
Common shares		300,000				100,000
Retained earnings, beginning of year		70,000				40,000
Bonds payable 8%		199,000
Cost of sales		397,800				230,400
Interest expense		16,500
Selling and administrative expense		40,000				20,000
Income tax expense		23,000				9,290
Dividends		10,000				8,000

Additional Information:

• P Company purchased its 90% interest in S Company in Year 2, on the date that S Company was incorporated, and has followed the equity method to account for its investment since that date.
• On April 1, Year 6, land that had originally cost $17,000 was sold by S Company to P Company for $20,000. P purchased the land with the intention of developing it, but in Year 10 it decided that the location was not suitable and the land was sold to a chain of drug stores.
• On January 1, Year 3, P Company issued $200,000 face value bonds due in 10 years. The proceeds from the bond issue amounted to $195,000.
• On July 1, Year 10, S Company purchased $40,000 of these bonds on the open market at a cost of $38,500. Intercompany bondholding gains (losses) are allocated between the two affiliates.
• S Company had $60,000 in sales to P Company during Year 10.
• Use income tax allocation at a 40% tax rate.

Required:

(a) Prepare a consolidated income statement for Year 10. (Input all values as positive numbers. Do not round intermediate answers. Round your final answers to nearest whole dollar.)

(b) Prepare a consolidated statement of retained earnings for Year 10. (Input all values as positive numbers. Omit $ sign in your response.)