Peat Company owns a 90% interest in Seaton Company. The consolidated income statement drafted by the controller of Peat Company appeared as follows:

During your audit you discover that intercompany sales transactions were not reflected in the controller?s draft of the consolidated income statement. Information relating to intercompany sales and unrealized intercompany profit is as follows:

Required:

Prepare a corrected consolidated income statement for Peat Company and Seaton Company for the year ended December 31, 2020.

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Peat Company and Subsidiary Consolidated Income Statement for Year Ended December 31, 2020 Sales Cost of Sales Operating Expense Consolidated Income Less Noncontrolling Interest in Consolidated Income Controlling Interest in Consolidated Net Income $14,000,000 $9,200,000 1,800,000 11,000,000 3,000,000 200,000 $ 2,800,000 Selling Unsold at Cost Price Year-End 2019 Sales-Seaton to Peat $1,500,000 900,000 $1,800,000 1,400,000 1/3 2020 Sales-Peat to Seaton 2/5