The following are the Year 9 income statements of Poker Inc. and Joker Company:

Additional Information
€¢ Poker acquired a 60% interest in the common shares of Joker on January 1, Year 4, at a cost of $420,000 and uses the cost method to account for its investment.
At that time, Joker's carrying amount of shareholders' equity was $600,000 and the fair value of each of its assets and liabilities equalled carrying amount except for equipment, which had a fair value of $100,000 in excess of carrying amount and an estimated remaining useful life of 10 years.
€¢ In Year 9, Joker paid a management fee of $50,000 to Poker. Poker recorded this as other income.
€¢ In Year 5, Poker sold two trademarks with an indefinite life to Joker and recorded a total gain on sale of $60,000 ($30,000 for each trademark). During Year 9, Joker sold one of these trademarks to an unrelated company for a gain of $40,000.
€¢ Depreciation expense is included with selling and administrative expenses.
€¢ During Year 9, Joker declared and paid dividends totalling $200,000.
€¢ The income tax rate is 30% for both companies.
Required:
(a) Assume that Joker is a joint venture that is jointly owned by Poker and several unrelated venturers, and that Poker uses the equity method to report its investment. Prepare Poker's income statement for the year ended December 31, Year 9.
(b) Assume that Joker is not a joint venture and, furthermore, that Poker's long term investment provides it with control over Joker. Prepare Poker's consolidated income statement for the year ended December 31, Year 9.

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INCOME STATEMENTS for the Year Ended December 31, Year 9 Poker Joker $800,000 110,000 40,000 950,000 550,000 150,000 40,000 740,000 210,000 63,000 $147,000 Sales Other income Gain on sale of trademark $1,000,000 200,000 1,200,000 600,000 200,000 50,000 850,000 350,000 105,000 245,000 Cost of goods sold Selling and administrative expenses Other expenses Income before income taxes Income taxes Profit