Condensed income statements from their own operations for Portland Company and its 80 percent-owned subsidiary, Salem Company, appear below.

Additional information:
1. Salem's beginning inventory includes $650,000 of profit on goods purchased from Portland, and Portland's ending inventory includes $500,000 of profit on purchases of $4,000,000 from Salem.
2. Portland's other expenses include a $360,000 loss on a sale of depreciable assets to Salem at the beginning of the year. These assets have a 6-year remaining life at the date of intercompany sale and are depreciated by the straight-line method.
3. Salem's other income includes a $190,000 gain on sale of land to Portland.
4. Salem previously recorded a gain of $250,000 on a patent sold to Portland for $500,000. At that time the patent had a remaining life of 5 years. At the end of this year (three years later) Portland sold the patent externally for $420,000, reporting the gain in Portland's other income account.
Required
a. Prepare a schedule to compute Portland Company's equity method income accrual and the noncontrolling interest in consolidated income for the current year.
b. Prepare a consolidated income statement for Portland Company and Salem Company.

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Portland Salem Sales. Other income .$40,000,000 6,000,000 46,000,000 $25,000,000 2,000,000 27.000,000 15,000,000 5,000,000 Total revenue.. Operating expenses. 7,000,000 800,000 Total expenses...wwwww36,000,000 20,800,000 $ 6,200,000 Net income (from own operations)...e$10.000,000