On January 1, 2010, Limbo Inc. purchased 80% of the outstanding common stock of Euphoria Co. at

Question:

On January 1, 2010, Limbo Inc. purchased 80% of the outstanding common stock of Euphoria Co. at a price of $1,200,000. At the end of 2010, each company prepared separate income statements, which are presented on the following page.

(in thousands) Sales Income from Euphoria Interest revenue Limbo $5,440 120 95 $5,655 3,550 1,020 350 $ 735 Euphoria S1,

1. Compute the amount that will be reported on the consolidated income statement as "Minority Interest Income."
2. Prepare a consolidated income statement.
3. Compare Limbo's reported net income with consolidated net income. Explain therelationship.

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