Pap Corporation purchased an 80 percent interest in Sak Corporation for $1,200,000 on January 1, 2012, at which time Sak's stockholders' equity consisted of $1,000,000 common stock and $400,000 retained earnings. The excess fair value over book value was goodwill. Comparative income statements for the two corporations for 2013 are as follows:

Dividends of Pap and Sak for all of 2013 were $600,000 and $200,000, respectively. During 2012 Sak sold inventory items to Pap for $160,000. This merchandise cost Sak $100,000, and one-third of it remained in Pap's December 31, 2012, inventory. During 2013 Sak's sales to Pap were $180,000. This merchandise cost Sak $120,000, and onehalf of it remained in Pap's December 31, 2013, inventory.REQUIRED: Prepare a consolidated income statement for Pap Corporation and Subsidiary for the year ended December 31,2013.

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Sak Pap Sales Income from Sak Cost of sales Depreciation expense Other expenses Net income $1,000 $2.000 224 (800) (260) (500) (80) (120) $ 300 (180) $ 984