Norco Company is an 80%-owned subsidiary of Victory Corporation. The separate income statements of the two companies for 2016 are as follows:

The following facts apply to 2016:
a. Norco Company sold $90,000 of goods to Victory Corporation. The gross profits on sales to Victory and to unrelated companies are equal and have not changed from the previous years.
b. Victory Corporation held $20,000 of the goods purchased from Norco Company in its beginning inventory and $30,000 of such goods in ending inventory.
c. Victory Corporation billed Norco Company $5,000 for computer services. The charge was expensed by Norco Company and treated as other income by Victory Corporation.
Prepare the consolidated income statement for 2016, including the distribution of the consolidated net income to the controlling and non-controlling interests. The supporting income distribution schedules should be prepared as well.

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Norco Corporation Company $ 220,000 150,000 150,000)12,500 $ 70,000 37,500 40,000 15,000 Sales Cost of goods sold.. Gross profit Other expenses Other income. Operating income Subsidiary income Net income 5,000 _ $35,000 22,500 14,400 $ 49,400 22,500