Pad Corporation acquired an 80 percent interest in Sot Company at book value a number of years ago.

Separate incomes of Pad and Sot for 2011 were $120,000 and $60,000, respectively. The only transactions between

Pad and Sot during 2011 were as follows:

1. Pad sold inventory items to Sot for $60,000. These items cost Pad $30,000, and half the items were inventoried at $30,000 by Sot at December 31, 2011.

2. Sot sold land that cost $70,000 to Pad for $96,000 during 2011. The land was held by Pad at December 31, 2011.

3. Sot paid $24,000 dividends to Pad during 2011.

REQUIRED: Compute consolidated net income for Pad Corporation and Subsidiary for 2011 under:

1. Traditional theory

2. Parent-company theory

3. Entity theory