Assume that P Company acquired S Company on January 1, 2011, for $110,000 cash. At the time, the net book value of S Company was $86,000. The market value was $95,000 with property and equipment having a market value of $9,000 over book value. The property and equipment has a three-year remaining life and is depreciated straight-line with no residual value. During 2011, the companies reported the following operating results:

Compute consolidated net income for the year ended December 31,2011.

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Revenues related to their own operations Expenses related to their own operations P Company $460,000 340,000 S Company $80,000 60,000