Balance sheet and income statement data for two affiliated companies for the cur rent year appear below.
Additional Information
€¢ Albeniz acquired an 80% interest in Bach on January 1, Year 1, for $272,000. On that date the following information was noted about specific net assets of Bach:

Amortization expense is grouped with distribution expenses. Albeniz€™s accumulated depreciation was $240,000 at the date of acquisition.
€¢ On January 1, Year 1, Bach had a retained earnings balance of $30,000.
€¢ Albeniz carries its investment at cost.

Required:
Prepare the following:
(a) Consolidated income statement
(b) Consolidated balance sheet

Inventory Land Equipment (estimated useful life 15 years) Misc. intangibles (estimated useful life 20 years) Carrying aount Fairvalue $50,000 45,000 78,000 42,000 $20,000 25,000 60,000 BALANCE SHEET as at December 31, Year 4 Bach $ 21,000 84,000 45,000 60,000 700,000 (350,000) Albeniz Cash Receivables Inventories Land Plant and equipment Accumulated depreciation Investment in Bach Company (cost) Advances to Bach Company $ 40,000 92,000 56,000 20,000 200,000 (80,000) 272,000 100,000 $700,000 Total assets $560,000 Accounts payable Advances payable Common shares Retained earnings Total liabilities and shareholders' equity $ 96,500 100,000 200,000 163,500 $560,000 $130,000 400,000 170,000 $700,000 INCOME STATEMENT Year Ended December 31, Year 4 Albeniz $600,000 6,700 6,400 613,100 334,000 20,000 207,000 1,700 20,700 583,400 $ 29,700 Bach Sales revenues Interest income Dividend income from Bach Total revenues Cost of goods sold Distribution expense Selling and administrative expense Financing expense Income taxes expense $400,000 00,000 225,000 70,000 74,000 6,000 7,500 382,500 S 17,500 Total expenses Net income