Arnold Company has owned 100 percent of Van Rossum Company since 20x7. The income statements of these two companies for the year ended December 31, 20x8, follow.

The following is additional information: (1) Van Rossum Company purchased $1,120,000 of inventory from Arnold Company, which it had sold to Van Rossum customers by the end of the year. (2) Van Rossum Company leased its building from Arnold Company for $240,000 per year. Prepare a consolidated income statement work sheet for the two companies for the year ended December 31, 20x8. Ignore income taxes.

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Arnold Company Van Rossum Company Net sales Cost of goods sold Gross margin Less: Selling expenses $6,000,000 $2,400,000 1,600,000 3,000,000 800,000 $1,000,000 200,000 400,000 ,200,000 600,000 $ 800,000 200,000 3,000,000 General and administrative expenses 1,200,000 $2, Total operating expenses Income from operations Other income Net income 240,000 $1,040,000 200,000