The consolidated income statement of a parent and its 80 owned subsidiary appears below It was prepared by an accounting student before reading this chapter CONSOLIDATED INCOME STATEMENT Sales$500,000Rental revenue 24,000Interest revenue 50,000Total revenue$574,000Cost of goods sold$350,000Rent expense 24,000Interest expense 35,000Administration expenses 45,000Income tax expense 42,000Non controlling interest in profit 9,000Total costs and expenses$505,000Profit$69,000 The following items were overlooked when the statement was prepared The opening inventory of the parent contained inventory purchased from the subsidiary with an intercompany profit of $5,000 This inventory was sold by the parent during the current year During the year, intercompany sales (at a 40 gross profit rate) were made as follows By the parent to the subsidiary$ 100,000By the subsidiary to the parent80,000 At the end of the year, half of the items purchased from the parent remained in the inventory of the subsidiary and none of the inventory purchased from the subsidiary remained in the parents inventory All of the rental revenue and 60 of the interest revenue were intercompany and appeared on the income statement of the parent Assume a 40 rate for income tax Required (a) Prepare a correct consolidated income statement (Leave no cells blank be certain to enter 0 wherever required Input all amounts as positive values ) begin tabular l r hline multicolumn 2 c ( begin array c text Parent Company text Consolidated Income Statement text for the Current Year end array ) hline Sales ( $ ) hline Interest revenue 320,000 hline hline Total revenue hline Cost of goods sold hline Rent expense hline Interest expense hline Administration expenses hline Income tax expenses hline hline hline Total expenses hline hline Attributable to hline Shareholders of parent hline Non controlling interests hline hline end tabular

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The consolidated income statement of a parent and its 80%-owned subsidiary appears below. It was prepared by an accounting student before reading this chapter. CONSOLIDATED

The consolidated income statement of a parent and its 80%-owned subsidiary appears below. It was prepared by an accounting student before reading this chapter.

CONSOLIDATED INCOME STATEMENTSales$500,000Rental revenue 24,000Interest revenue 50,000Total revenue$574,000Cost of goods sold$350,000Rent expense 24,000Interest expense 35,000Administration expenses 45,000Income tax expense 42,000Non-controlling interest in profit 9,000Total costs and expenses$505,000Profit$69,000

The following items were overlooked when the statement was prepared:

The opening inventory of the parent contained inventory purchased from the subsidiary with an intercompany profit of $5,000. This inventory was sold by the parent during the current year.
During the year, intercompany sales (at a 40% gross profit rate) were made as follows:

By the parent to the subsidiary$ 100,000By the subsidiary to the parent80,000

At the end of the year, half of the items purchased from the parent remained in the inventory of the subsidiary and none of the inventory purchased from the subsidiary remained in the parents inventory.
All of the rental revenue and 60% of the interest revenue were intercompany and appeared on the income statement of the parent.
Assume a 40% rate for income tax.

Required:

(a) Prepare a correct consolidated income statement. (Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values.)

\\begin{tabular}{|l|r|} \\hline \\multicolumn{2}{|c|}{\$ \\begin{array}{c}\\text { Parent Company } \\\\ \\text { Consolidated Income Statement } \\\\ \\text { for the Current Year }\\end{array} \$} \\\\ \\hline Sales & \$ \\$ \$ \\\\ \\hline Interest revenue & 320,000 \\\\ \\hline & \\\\ \\hline Total revenue & \\\\ \\hline Cost of goods sold & \\\\ \\hline Rent expense & \\\\ \\hline Interest expense & \\\\ \\hline Administration expenses & \\\\ \\hline Income tax expenses & \\\\ \\hline & \\\\ \\hline & \\\\ \\hline Total expenses & \\\\ \\hline & \\\\ \\hline Attributable to: & \\\\ \\hline Shareholders of parent & \\\\ \\hline Non-controlling interests & \\\\ \\hline & \\\\ \\hline \\end{tabular}