The comparative consolidated Income statements of a parent and its $75\%-$owned subsidlary were prepared Incorrectly as at December

$31$ and are shown in the table given below. The following items were overlooked when the statements were prepared:

The Year $5$ gain on sale of assets resulted from the subsidlary selling equipment to the parent on September $30.$ The parent

Immediately leased the equipment back to the subsidiary at an annual rental of $$19,200.$ This was the only intercompany rent

transaction that occurred each year. The equipment had a remalning life of five years on the date of the intercompany sale.

The Year $6$ gain on sale of assets resulted from the January $1$ sale of a bullding, with a remalning life of seven years, by the

subsidlary to the parent.

Both galns were taxed at a rate of $40\%.$

Required:

Prepare correct consolidated Income statements for Years $5$ and $6.($Input all values as positive numbers. Leave no cells blank $-$ be

certain to enter zero wherever required. Omit $ sign in your response.$)$The comparative consolidated income statements of a parent and its $75\%-$owned subsidiary were prepared incorrectly as at December $31$ and are shown in the table given below. The following items were overlooked when the statements were prepared:

The Year $5$ gain on sale of assets resulted from the subsidiary selling equipment to the parent on September $30.$ The parent immediately leased the equipment back to the subsidiary at an annual rental of $$19,200.$ This was the only intercompany rent transaction that occurred each year. The equipment had a remaining life of five years on the date of the intercompany sale.

The Year $6$ gain on sale of assets resulted from the January $1$ sale of a building, with a remaining life of seven years, by the subsidiary to the parent.

Both gains were taxed at a rate of $40\%.$

CONSOLIDATED INCOME STATEMENTS

Year $5$ Year $6$

Miscellaneous revenues $ $780,000$ $ $855,000$

Gain on sale of assets $12,80046,200$

Rental revenue $4,80019,200$

$797,600920,400$

Miscellaneous expenses $404,600493,540$

Rental expense $56,90066,100$

Depreciation expense $81,00084,900$

Income tax expense $84,00097,500$

Non$-$controlling interest $35,5005,880$

$662,000747,920$

Net income $ $135,600$ $ $172,480$

Required:

Prepare correct consolidated income statements for Years $5$ and $6.($Input all values as positive numbers. Leave no cells blank $-$ be certain to enter zero wherever required. Omit $ sign in your response.$)$

Parent Company

Corrected Consolidated Income Statements

Years $5$ and $6$

Year $5$ Year $6$

Miscellaneous revenues $ $780000$ Numeric ResponseEdit Unavailable. $780000$ correct. $ $855000$ Numeric ResponseEdit Unavailable. $855000$ correct.

Miscellaneous expense $404600$ Numeric ResponseEdit Unavailable. $404600$ correct. $493540$ Numeric ResponseEdit Unavailable. $493540$ correct.

Rent expense $52100$ Numeric ResponseEdit Unavailable. $52100$ correct. $46900$ Numeric ResponseEdit Unavailable. $46900$ correct.

Depreciation expense $81640$ Numeric ResponseEdit Unavailable. $81640$ incorrect. $94060$ Numeric ResponseEdit Unavailable. $94060$ incorrect.

Income tax expense $78880$ Numeric ResponseEdit Unavailable. $78880$ incorrect. $79020$ Numeric ResponseEdit Unavailable. $79020$ incorrect.

Consolidated net income $ $162780$ Numeric ResponseEdit Unavailable. $162780$ incorrect. $ $141480$ Numeric ResponseEdit Unavailable. $141480$ incorrect.

Attributable to:

Shareholders of Parent $ $122085$ Numeric ResponseEdit Unavailable. $122085$ incorrect. $ $106110$ Numeric ResponseEdit Unavailable. $106110$ incorrect.

NCI $40695$ Numeric ResponseEdit Unavailable. $40695$ incorrect. $35370$ Numeric ResponseEdit Unavailable. $35370$ incorrect.

$ $