SOLVE ALL PARTS RELATED TO THE PROBLEM TO FULLY SOLVE!

Preparing a consolidated income statement-Equity method with noncontrolling interest, AAP and upstream and downstream intercompany inventory profits A parent company purchased an 80% controlling interest in its subsidiary several years ago. The aggregate fair value of the controlling and noncontrolling interest was $360,000 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 $216,000 and to an unrecorded patent valued at $144,000. The building asset is being depreciated over a 16- year period and the patent is being amortized over an 8-year period, both on the straight-line basis with no salvage value. During the current year, the parent and subsidiary reported a total of $540,000 of intercompany sales. At the beginning of the current year, there were $37,800 of upstream intercompany profits in the parent's inventory. At the end of the current year, there were $58,500 of downstream intercompany profits in the subsidiary's inventory. During the current year, the subsidiary declared and paid $81,000 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: Parent Subsidiary Income statement: Sales $8,280,000 $1,170,000 Cost of goods sold (5,400,000) (540,000) Gross profit 2.880,000 630,000 Income (loss) from subsidiary 133,740 Operating expenses (2,160,000) (396,000) Net income $853,740 $234.000 a. Compute the income (loss) from subsidiary of $133,740 reported by the parent company in its preconsolidation income statement. Do not use negative signs with your answers below. Subsidiary's net income $ 0 Upstream sales 0 Adjusted subsidiary income 0 P % of interest 0 % 0 $ 0 0 Downstream sales Income (loss) from subsidiary $ 0 b. Prepare the consolidated income statement for the current year. Do not use negative signs with your answers below. Consolidated Income Statement Sales $ 0 Cost of goods sold 0 Gross profit 0 Operating expenses 0 0 0 $ 0